Sunday, November 27

Carlsberg expresses intention to launch new line of draught beer


KUCHING: Carlsberg Brewery Malaysia Bhd’s (Carlsberg) management has expressed its intention to launch a new line of draught beer in addition to its existing Carlsberg Green Label.

REVISITING TRADITIONAL CHANNELS: Photo shows the Carlsberg factory in Malaysia. The company is revisiting traditional channels to tap into the growing spending power of consumers. — Photo by

In its research report, OSK Research Sdn Bhd (OSK Research) said it was informed that the new line was an existing product already in the market, but would be new in the sense that it would come under the Carlsberg umbrella.

The new brew was set to compete against rival brand Heineken, which currently had a hold on the premium beer segment. Other than that, Carlsberg was also set to revisit traditional trade channels such as coffee shops and sundry shops, on which it had placed less emphasis in previous years.

Carlsberg felt that this segment had been largely untapped in recent years even though the spending power of consumers in Malaysia’s second and third tier cities had grown. The company saw this channel as being attractive given the low advertising and promotion (A&P) expenditure although traditional trade channels only represented 40 per cent of all beer trades.

To recap, Carlsberg’s latest financial results were spot on in accordance with the research house’s estimates and also consensus expectations, with revenue and net profits making up 99 per cent of OSK Research’s full-year estimates.

Earnings grew at all levels mainly due to the incorporation of Carlsberg Singapore into the group, which caused revenue to surge 31 per cent year-on-year (y-o-y) while net profits soared by double digits to RM133.2 million.

Furthermore, the better efficiencies and higher growth upon the incorporation exercise helped to lift earnings before interest, tax, depreciation and amortisation (EBITDA) margins to 14.1 per cent from 11.3 per cent in the preceding year.

The company’s full-year dividend payout including special dividends amounted to 58 sen per share or 66 per cent ahead of the research house’s expectations, based on a 100 per cent payout ratio.

OSK Research pegged Carlsberg’s target price at RM7.20 per share.