Steady consumer demand to spur Carlsberg

PETALING JAYA: Carlsberg Brewery Malaysia Bhd is expected to see solid earnings growth underpinned by steady consumer demand.

RHB Research noted that for the immediate term, respectable earnings growth is seen in the second quarter of the current financial year (2Q25) as the 2Q24 sales were impacted by weaker demand post a price increase.

“Overall, we expect consumption to remain steady in FY25, underpinned by tight enforcement to keep contraband trade at bay whilst the positive traction of tourist arrivals and rise in disposable income should provide further support.

“Against a backdrop of rising operating costs, we believe that Carlsberg Malaysia’s premiumisation strategy, the full impact of price increases, as well as its focus on enhancing operational efficiency and productivity will provide buffers to protect profit margins.”

The reseach house said Carlsberg Malaysia would also focus on marketing and consumer engagement initiatives to stimulate consumption and spending.

For the first quarter ended March 31, 2025 (1Q25), Carlsberg Malaysia saw its top line drop by 8.67% to RM662.81mil from RM725.76mil in the previous corresponding quarter.

Despite the lower revenue, the brewery posted a 7.49% increase in net profit to RM94.52mil from RM87.93mil in 1Q24.

Hong Leong Investment Bank (HLIB) Research said Carlsberg Malaysia is off to a strong start, with the Malaysian market leading its performance.

“The Singapore operations continued to be weighed down by higher advertising and promotional (A&P) spending, reflected in lower earnings before interest and tax margins.

“We expect continued A&P investments in its Singapore operation to build Sapporo’s market share, which has yet to match that of its predecessor Asahi.”

The research house said growth in FY25 should be underpinned by stronger sales in Malaysia, driven by better disposable income and rising tourist arrivals, increasing contributions from the Sapporo brand and the full-year impact of earlier average selling price hikes.

“While elevated A&P spending may pressure margins, this could be partially mitigated by improved input costs from a potentially stronger ringgit.”

UOB Kay Hian said Carlsberg Malaysia’s earnings came in within expectations.

“Carlsberg Malaysia reported a core net profit of RM94.8mil in 1Q25. This is within expectations, making up 26% of both our and consensus full-year forecasts.”