PETALING JAYA: Heineken Malaysia Bhd reported a decline in revenue and net profit for the third quarter ended Sept 2023 (Q3’23) due to weak consumer sentiment driven by rising cost of living and macroeconomic concerns.
Revenue in Q3’23 fell by 17% to RM599.66 million compared with RM720.47 million in Q3’22. Profit before tax (PBT) came to RM115.33 million, down 27% from RM157.44 million in Q3’22.
Net profit for Q3’23 was 20% lower at RM87.33 million (Q3’22: RM108.74 million).
In Q3’23, revenue decreased mainly due to lower sales arising from weak consumer sentiment driven by rising cost of living and macroeconomic concerns. The group had a strong base in the third quarter of 2022 as the market had an upsurge in sales (revenue +85% versus the third quarter of 2021), following the reopening of the economy and international borders at the start of the endemic phase.
The group views this quarter’s performance as a continuation of the form of market correction as reported in the previous quarter’s report.
For the nine-month period, group revenue was 7% lower to RM1.91 billion mainly due to weaker consumer sentiment attributed to growing macroeconomic concerns and the strong rebound in 2022, buffered by higher sales in the first quarter due to Chinese New Year festive period.
Group PBT declined by 14% to RM378.85 million principally due to lower revenue and relatively higher promotional and marketing expenses incurred during the period.
Managing director Roland Bala said, “2023 remains challenging as the market goes through corrections following the rebound in 2022 coupled with weaker consumer sentiment due to macroeconomic concerns. Nevertheless, our One Strong Winning Team remains agile and resilient. We continued our focus to deliver against our EverGreen strategy to future proof our organisation whilst navigating the challenges in this soft period.”
The board of directors does not recommend any dividend in respect of the quarter ended Sept 30, 2023.
On outlook, Roland shared, “In light of cautious consumer spending due to macroeconomic concerns, we anticipate the market to remain challenging. The group will remain agile in the volatile business environment and will continue to focus on our EverGreen strategy to future-proof the business. In the absence of the one-off Prosperity Tax, we also look forward to a positive impact on the group’s net profit this year.”
On sustainability, in the recently concluded UN Global Compact Network Malaysia & Brunei Forward Faster Sustainability Awards 2023, Heineken Malaysia was awarded for the second consecutive year in the Enterprise level, Large Company category for Water Resilience. This achievement underscores the group’s unwavering commitment to environmental stewardship and responsible business practices. Heineken Malaysia was also nominated as finalist in the Climate Action category, reflecting the group’s dedication to addressing the pressing challenges posed by climate change and the progress that has been made on the journey towards reaching its net zero ambitions.
In terms of challenges, Roland said, “The group welcomes the stance taken by the government not to increase excise duties on beer in its latest Budget 2024, as any hike in excise rates will drive greater demand for illicit alcohol.”