KUALA LUMPUR (Aug 19): Carlsberg Brewery Malaysia Bhd (KL:CARLSBG) said its net profit slipped 10% in the second quarter from a year earlier, partly due to higher marketing spending and inflationary cost increase.

Net profit for the three months ended June 30, 2024 (2QFY2024) was RM79.40 million, compared with RM88.24 million a year earlier, Carlsberg said in an exchange filing on Monday. The group also blamed “rebalancing of higher trade purchases” ahead of a product price increase for the decline.

Revenue for the quarter, meanwhile, was just a tad higher at RM507.48 million versus RM506.73 million in 2QFY2023.

“The group remains mindful of the uncertain global economic outlook as inflationary pressures, high interest rates and currency fluctuations will continue to dampen consumer spending,” Carlsberg said. “However, seasonal celebrations towards year-end are anticipated to boost sales volumes.”

The brewer declared a second interim dividend of 20 sen per share for a total distribution of RM61.1 million, lower than the 22 sen per share payout for the comparable period last year.

For the first half of FY2024, Carlsberg’s net profit fell 3.4% to RM167.3 million from RM173.3 million a year earlier, due to deferred tax liabilities arising from its Sri Lankan unit.

Half-year revenue grew 5.7% to RM1.23 billion from RM1.16 billion, helped by the longer selling period before Chinese New Year in early 2024.

In terms of geographical breakdown, the group’s Malaysian operations saw its segment profit rise 6.2% to RM182 million in the first half, while revenue grew 7.6% to RM905.2 million. However, profit for its Singaporean segment fell 21.8% to RM36.6 million as revenue grew by merely 0.6%.

Mainstream sales grew 7% while premium sales fell 13% year-on-year for the cumulative six-month period.

During a briefing on the financial results, the group's managing director Stefano Clini was asked about the Sapporo beer portfolio following the commencement of local production and distribution since January this year. In his reply, Clini shared that the Sapporo beer portfolio in Malaysia is now bigger than its previous Asahi portfolio, showcasing strong receptiveness from customers in Malaysia

As for Singapore, Clini explained that as Asahi previously had contributed more, it is normal that the current Sapporo portfolio would take more time to fill up the void. Nevertheless, current business momentum remained optimistic, he said.

In terms of capital expenditure plans, chief financial officer Vivian Gun said the group would continue to invest in the next one to two years, as part of the group’s effort to modernise its production system. Savings from its operational efficiencies has allowed the brewer to offset inflation pressures.

Meanwhile, corporate affairs director Pearl Lai said the new canning line could offer the group flexibility and lead to the group offering more "unique products" to cater to market demand.

Addressing analysts’ questions on beer consumption, Clini said the industry's total consumption volume has not returned to pre-Covid levels. Nonetheless, he was satisfied with Carlsberg’s improving sales and profit that was on a healthy upward trajectory post-covid.

Shares in Carlsberg Malaysia closed two sen or 0.1% lower to RM18.70, giving the brewer a market capitalisation of RM5.72 billion.