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Author: edgeinvest   |   Latest post: Wed, 7 Dec 2022, 8:49 AM

 

Heineken's 1Q Profit Leaps 54% to RM113.4m to Kick Off FY22

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KUALA LUMPUR (May 11): Heineken Malaysia Bhd kicked off financial year 2022 (FY22) strongly as net profit jumped 54% to RM113.38 million in the first quarter of FY22 (1QFY22) ended March 31, 2022 versus RM73.54 million in the same period last year.

Earnings per share (EPS), based on 302.1 million shares, stood at 37.53 sen from 24.34 sen last year, according to its filing on Wednesday (May 11).

Quarterly revenue grew to RM698.33 million, a 27% improvement from RM547.74 million.

Despite a strong start to FY22, no dividend was declared.

Compared with the preceding quarter, Heineken's net profit rose 18.29% from RM95.85 million while revenue only improved marginally by 1% from RM692.34 million.

Separately in a statement, Heineken attributed its improved revenue mainly to higher sales driven by easing of Covid-19 restrictions, effective commercial execution during Chinese New Year as well as revenue growth initiatives such as price adjustments for certain products in the preceding quarter and promotional spend optimisation.

It said despite the pressure on input cost and increased investment in sustainable brand growth, the group managed to grow its profit.

"The group's performance in 1QFY22 improved against pre-pandemic levels as well, with group revenue growing by 33% (1QFY19 revenue: RM525.1 million) and group PBT (profit before tax) improving by 120% (1QFY19 PBT: RM70.4 million), indicating a significant recovery attributed to the easing of social restrictions as well as the effectiveness of the group's commercial strategies," the statement highlighted.

"Despite the challenging external environment, we have delivered a commendable performance for the quarter.

"Our cost and value initiatives are bearing fruit, whilst we continue investing behind our brands with a consumer-first approach. We thank our employees and business partners for their resilience and commitment as we support Malaysia's accelerated economic recovery from the Covid-19 pandemic," Heineken's managing director Roland Bala said in the statement.

He added that effective commercial execution during the quarter enabled top line growth whilst efficient investments helped deliver an improved bottom line.

On the brewery's business outlook, Bala said the group is mindful of the volatile and uncertain situation externally and has learned to be agile and highly adaptable to changes.

"Whilst we are encouraged by the gradual improvement in the external environment, we remain focused on our EverGreen strategy, which is our multi-year strategy, allowing us to adapt to a fast-changing world and grow stronger, by adapting to the new external dynamics, ensuring the safety of our people, keeping a tight rein on costs and accelerating our business recovery to emerge stronger from the Covid-19 crisis," he added.

However, the group also expects continued pressure from global supply chain disruptions and rising input cost given the price volatility of raw and packaging materials but noted that it will take appropriate measures to mitigate the impact when necessary.

Heineken also said it welcomes the stance taken by the government not to increase excise duties on beer in Budget 2022, as any hike in excise rates will drive greater demand for illicit alcohol. It said that it remains committed to supporting the government to stamp out illicit trade through holistic efforts including strengthening enforcement and raising greater awareness in the market.

Heineken shares slipped 32 sen or 1.35% to RM23.32 on Wednesday, valuing the brewery group at RM7.04 billion. The counter has risen RM1.64 or 7.56% from RM21.68 since the beginning of 2022.

Source: TheEdge - 12 May 2022

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