KUALA LUMPUR: Carlsberg Brewery Malaysia Bhd has allocated its highest capital expenditure (capex) amount in 30 years at RM110mil, to modernise its production facilities that is set to be completed by this year.
Its managing director Stefano Clini (pic) said this is a massive upgrade that would improve the filling capacity and allow greater flexibility in packaging options, higher automation, more conducive working environment as well as greater sustainability performance in energy, water and waste management.
“The capex of RM110mil for this year is a total re-staging of our production capacity focused on bottling.
“It is not only an increase of capacity with brand new shiny lines but also an increase in efficiency as a big step forward in our journey towards being an environmentally friendly company in terms of water waste, energy consumption as part of our long term environment, social and governance (ESG) commitments,” he told reporters in an online media briefing during its fourth quarter ended Dec 31 (Q4’21) financial results.
For the full financial year ended Dec 31 (FY21), the brewer reported a net profit of RM201mil, up 23.9% as compared to RM162.2mil a year ago, on the back of a flat revenue of RM1.8bil.
It said the higher earnings were mainly driven by cost optimisation, innovation and premiumisation initiatives.
Carlsberg said its top-line was impacted by lower sales due to a 11-week brewery operations suspension and dine-in restrictions in both Malaysia and Singapore markets.
Meanwhile, for Q4’21, its net profit was up 88.2% to RM71.4mil in the quarter from RM38mil a year ago.
The group’s revenue rose 14.8% to RM542.3mil in the quarter from RM472.5mil a year ago.
For Q4’21, Carlsberg proposed a single-tier final dividend of 46 sen per share. The total declared and proposed dividend for FY21 is 56 sen per share, equivalent to RM171.2mil which is an increase of 40% compared to a year ago.
Asked about on-trade recovery, Clini disclosed that a full recovery would not take place this year due to the emergence of new Covid-19 variants.
“In the last two weeks we have seen a decrease of 50% for patrons in the on trade outlets. We don’t know how long this will last but there are ups and downs so we have to buckle up for the ride,” he added.
For FY22, Carlsberg chief financial officer Vivian Gun anticipates that rising commodity prices could impact the group’s bottom line. Given that the aluminium prices climbed higher last year, she explained that the group had hedged the commodity ahead of the rise in costs.
“So the impact of 2021 is muted through the hedges,” Gun conceded.
Moreover, Gun said that price of barley was also hedged before the start of 2021, adding that hedging the prices earlier for both aluminium and barley did not impact the cost last year.
“Having said that, for 2022, unfortunately the commodity price has remained stubbornly high, and we keep seeing increase and we anticipate this will have an impact on our bottom line eventually.”
Moving forward, Clini expects 2022 to be a challenging year due to the recent surge of Covid-19 cases in both Malaysia and Singapore coupled with the emergence of the new variant. “We are also mindful of the escalating commodity prices that will add further costs pressure and uncertainties,” he said.