SUBANG JAYA (Aug 15): Heineken Malaysia Bhd, which reported a 17.7% drop in its second quarter net profit, said it expects a slowdown in the demand for beer amid the challenging macroeconomic environment.

Its managing director Roland Bala said the group will focus on cost optimisation and drive efficiency across the organisation going forward as it braces for a challenging market as consumers remain cautious about loosening their purse strings.

The group will take its cue from developments on the interest rate front and the global economy to gauge the market direction, said Roland in a media briefing on Tuesday (Aug 15) after the release of its results for the quarter ended June 30, 2023 (2QFY2023).

“If the US continues to increase the interest rate, I will get very worried because people will not invest. They will rather put the money in the bank.

"But if [the rate] comes down, then I believe that people are willing to invest, people are willing to spend money. And that is when a lot more discretionary income floats into the market. So I think that will be the signal that I will personally look at.

"Of course there are other economies like China and all that. So I will be looking forward to China turning the corner as well. This is because we are a trading nation with China, US and Europe. So when those big markets start to pick up, I think that is when we can have a good time as well,” he added.

The brewer's net profit rose 5.11% to RM90.47 million in 2QFY2023, from RM86.07 million a year earlier, as efficiency gains through cost and value initiatives mitigated lower revenue. On a quarter-on-quarter basis, however, its net profit was lower than the RM109.93 million reported for 1QFY2023.

Revenue fell 11.69% year-on-year to RM569.24 million, from RM644.58 million in 2QFY2022, due to lower sales, attributed to weak consumer sentiment driven by rising cost of living and currency volatility.

This is the group's lowest quarterly revenue since 3QFY2021, when it posted a revenue of RM389.85 million. In 1QFY2023, revenue was RM740.22 million.

Heineken Malaysia has declared an interim dividend of 40 sen per share, payable on Nov 10.

For the six months ended June 30, the group's net profit was marginally up by 0.47% to RM200.4 million from RM199.46 million in the previous corresponding period.

Six-month revenue fell 2% to RM1.31 billion from RM1.34 billion previously as the persistent soft market sentiment impacted the group’s sales performance.

Shares of Heineken Malaysia closed down eight sen or 0.31% at RM25.82, giving the group a market capitalisation of RM7.8 billion.

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