Carlsberg may raise beer prices

KUALA LUMPUR (Feb 28, 2012): Carlsberg Brewery Malaysia Bhd, which reported a 24% jump in net profit for the year ended Dec 31, 2011, may raise beer prices again this year in view of rising raw material costs and inflation, said its managing director Soren Ravn.

"The rising input cost of products, particularly the price of malt, a key material in brewing beer, is approximately 20% higher this year. Cost of aluminium cans in 2011 had also increased by 27% from 2010, while power tariff as well as natural gas costs also rose from mid-2011," he said.

Speaking at a media briefing on its FY11 financial results yesterday, Ravn said the company will decide by the end of the first quarter whether there will be a price increase as well as the quantum. The last price revision was in April last year, with a 3% increase.

Ravn said the quantum of increase, if any, will be aligned to increases in the previous years and rate of inflation.

For the year ended Dec 31, 2011, the company posted a higher net profit of RM167.4 million from RM134.1 million in FY10 on the back of RM1.5 billion revenue. For the final quarter, its net profit grew 22% to RM37.35 million.

Its net profit reflects a one-off gain from the reversal of an over-provision for royalty expenses made in the previous financial year amounting to RM12 million, which if excluded, would bring its net profit to RM157.4 million.

The company also announced a total dividend payout of RM167.8 million or 72.5 sen per share. Ravn said the payout is 100% of its net profit, higher than its promise of 50-70% of net profit.

According to him, the overall beer market this year will see a small percentage of growth with Singapore projected to grow at 6% this year and twice as fast as Malaysia next year, while Malaysia remains on single-digit growth.

The company also aims to produce, distribute and sell some of its imported beers in Malaysia. It began local production of its first Asian beer, Asahi, last year.

In the next three to six months, it will start local production of Kronenbourg 1664 and Kronenbourg 1664 Blanc.

"There is interest from other markets to source Kronenbourg from Malaysia. We want to be a regional hub in Asia," said Ravn, adding that it is looking to export to Singapore, followed by Hong Kong and China.

Ravn said despite the challenging environment this year, it is confident of becoming a strong contender in the malt liquor market, boosted by its premium beer segment, UEFA Euro 2012 promotions and contributions from its Singapore operations.

It will also be launching one or two new products in June or July.