PETALING JAYA: Heineken Malaysia Bhd is reducing capital expenditure (capex) and adopting various cost control measures to preserve cash, in light of the uncertain economic and business regulatory environment.
Finance director Szilard Voros said the brewery is targeting 40% to 45% reduction in capex, compared with last year.
“To minimise the outflow of cash, we have to reduce capex. Some of it are postponement of activities related to our brewery operations. We are also reducing our costs, and cutting everything that is not necessary, ” said Voros during a digital briefing with the media and business analysts.
Regarding dividends, managing director Roland Bala said: “The board feels that a prudent approach is needed and will re-evaluate the situation towards year-end.”
Heineken Malaysia had posted a RM18.2mil net loss for the second quarter ended June 30,2020 compared with a RM65.7mil net profit a year ago. Revenue during the quarter under review dropped 50.5% year-on-year to RM253.7mil.
The unprecedented quarterly loss was mainly due to the suspension of operations of the Sungei Way brewery from March 18 till May 3 to comply with the MCO.
For the first half, net profit dropped 67.3% to RM38.77mil while revenue declined by 26% to RM769.6mil, mainly due to the 22% decline in beer volume.
Roland pointed out while there was gradual recovery of business in May and June, “we are not out of the woods yet, and still cautious on how the Covid-19 pandemic continues to affect the economy.”
He noted that 20% of the on-trade channel, with regards to pubs and entertainment outlets with liquor licenses, are still closed especially in the Federal Territory and Johor.
Roland said the company is working with distributors to provide access to adequate financing facilities.
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