CARLSBG 2836 CARLSBERG BREWERY MALAYSIA BHD | Revenue Breaks Historical High (Q1FY2023)

 CARLSBG 2836 CARLSBERG BREWERY MALAYSIA BHD | Revenue Breaks Historical High (Q1FY2023)

Alcohol consumption has become a common social and cultural activity in today's society. With the continuous development of the world economy and the improvement of people's living standards, the demand for alcoholic beverages has continued to grow, and the alcohol industry has attracted more attention nowadays.


Carlsberg Brewery Malaysia Berhad (CARLSBG, 2836), one of Malaysia's largest beer brands, recently released an excellent quarterly performance report, with record-high revenue for the first quarter.



CARLSBG is a liquor producer established in 1969 and is one of the holding subsidiaries of the Carlsberg Group in Malaysia. The company mainly produces and sells beer, cider, and other beverages, with its main brands including Carlsberg, Asahi, Somersby, Connor's, Royal Stout, etc.


CARLSBG has production facilities and online and offline sales networks in Malaysia, Singapore, Sri Lanka, and other regions, and is committed to becoming one of the largest beer and beverage manufacturers in Asia. According to the 2022 annual report, Malaysia is CARLSBG's largest customer market, accounting for approximately 70.10% of the total revenue for the 2022 fiscal year. Singapore is the second-largest, accounting for approximately 28.68% of the total revenue.


Let's take a look at CARLSBG's latest financial results (Q1FY2023).


Revenue Comparison (YoY +0.97%, QoQ +7.74%)


For the first quarter ended March 31, 2023, the company achieved approximately RM660.20 million in revenue, an increase of approximately RM6.35 million or 0.97% compared to the same period last year (RM653.85 million). This was due to increased consumption during the Chinese New Year earlier this year.


Of the RM660.20 million in revenue, approximately RM469.30 million came from Malaysian customers, an increase of approximately 3.35% compared to the same period last year. However, Singapore's revenue decreased by approximately 4.41% YoY to around RM190.90 million. Management stated that due to the earlier Chinese New Year this year, the sales period was shortened during the festive interval; otherwise, the company's sales volume could have been further increased.


Driven by the Chinese New Year, CARLSBG's revenue increased by approximately RM47.45 million or 7.74% QoQ.


Net Profit Comparison (YoY -7.15%, QoQ +41.45%)


Compared to the same period last year, the company's net profit decreased by approximately RM6.55 million or 7.15% to around RM85.04 million. This was mainly due to an increase in marketing expenses. In addition, the profit sharing from the joint venture company Lion Brewery (Ceylon) PLC in Sri Lanka also decreased, leading to a YoY decline in CARLSBG's net profit.


According to the quarterly report, due to the significant depreciation of the Sri Lankan rupee against the Malaysian ringgit, the joint venture company's profit share in Sri Lanka decreased by 52.40% to around RM3.20 million.


Despite this, compared to the previous quarter, the company's net profit increased significantly by approximately RM24.92 million or 41.45%. This was because there were no one-off expenses in this quarter, i.e. the disposal loss of the old bottling line and lower marketing investment.


It is worth mentioning that the company also announced a first interim dividend of RM 0.2100 for this quarter, with an ex-date of May 24, 2023, and payment on June 8, 2023.


Outlook


The global economy continues to face uncertainty, with expected increases in inflationary pressures. Challenges will arise from disruptions to global supply chains and rising prices. To address these challenges, the company will continue to implement its SAIL'27 corporate strategy, focusing on strengthening its core beer business, increasing the proportion of high-end products, and continuing to develop non-alcoholic beer to attract more consumers who prefer non-alcoholic beverages.


Furthermore, the lifting of global travel restrictions is expected to boost consumer demand, particularly with an anticipated increase in tourist numbers in Malaysia and Singapore. Not to mention, the end of the Prosperity Tax in 2022 will also have a positive impact on the company's profitability.


In light of these developments, how should readers view CARLSBG, with a current P/E ratio of 21.43 and dividend yield of 4.04%?


#CARLSBG

https://xifu.my/OpinionsComment.aspx?BID=B03342432P1AA0CB