CARLSBERG Brewery Malaysia Bhd is looking at a recovery over the second half of 2020 as well as 2021, following a weaker second quarter for its 2020 financial year ended June 30.
“While the near-term outlook will be challenging owing to consumers avoiding excessive social gatherings and the selective prohibition of on-trade outlets, we foresee a gradual recovery in the overall economy and beer consumption in 2HFY20,” said TA analyst Jeff Lye.
Lye also noted that the recovery in the brewer’s 2HFY2020 will be followed by a strong demand uptick in 2021, when several major sporting events will resume, such as the 2021 Tokyo Olympics and the Euro Cup.
The analyst also noted that Carlsberg will also be optimising its cost base, reprioritising investments towards digital campaigns and its e-commerce and off-trade channels, and provide support to key business partners and stakeholders.
Carlsberg saw a drop of 42.1% year-on-year (yoy) for its core profit of RM88.4 mil, due to the reduced revenue of RM877.1 mil for the half.
“The sales volume of core beer and premium beer dropped by 17% yoy and 20% yoy respectively,” said Lye.
The drop in sales volume, according to Lye, was due to the suspension of the brewery plant during the movement control order (MCO), reduced on-trade sales due to the selective prohibition of operations, the shift in consumption patterns to avoid excessive social gatherings, and the weakness in tourism.
TA Securities upgraded Carlsberg to a hold call from a previous sell call, but lowered its target price to RM24.50 from a previous RM26.
At the end of the morning’s trading, Carlsberg’s shares were last done at RM23.16, down 4 sen, with 59,600 shares traded. – Aug 17, 2020
