PETALING JAYA: Heineken Malaysia Bhd’s net profit for the third quarter ended Sept 30 (Q3’20) dropped 40.7% to RM61.25 million from RM103.3 million a year ago mainly due to a beer volume decline in the mid-teens as business was still in the recovery stage amid the subdued market conditions.
Consequently, group revenue contracted by 21.4% to RM473.75 million as compared to RM602.53 million in the same quarter in 2019.
Despite the gradual recovery of economic activities, the group’s business performance particularly in the on-trade channel continued to be affected. Certain outlets with liquor licences such as pubs, and entertainment outlets that do not have restaurant licenses, are still prohibited from operating whilst sales in on-trade outlets such as restaurants and coffee shops remained slow due to various restrictions and some consumers shifting towards in-home consumption.
In view of the current economic conditions, the group continued to adopt a prudent approach in respect of its dividend payment and hence, no interim dividend has been recommended for the quarter due to the uncertainty around the profit base for 2020 at this time.
For the cumulative period of 9M’20, its net profit dropped 54.9% to RM100.02 million from RM221.8 million a year ago due to lower beer volume and the one-off settlement of Custom’s bill of demand amounting to RM7.2 million in June 2020.
Group revenue declined by 24.2% to RM1.24 billion from RM1.64 billion as compared to the same period last year.
Commenting on the results, managing director Roland Bala said the group remains cautious as the market is experiencing a slowdown given the economic uncertainties and challenging market environment.
“We are concerned about the impact of the CMCO on the survival of our trade partners and customers especially our on-trade customers. Our priority remains the health and safety of our people, working with our trade partners to adapt to the new market realities and navigating the crisis while building a sustainable future.”
On the outlook for the remainder of the year, Roland said the re-imposition of more stringent measures to contain the resurgence of Covid-19 cases in most states across the Peninsula since October 2020 will impact the momentum of the market recovery in the fourth quarter, especially the on-trade business.
“The group will continue to proactively right-size its cost base to adapt to the new market realities, reinvest into profitable growth and strengthen its bottom line,” he added.