By S BIRRUNTHA / Pic BLOOMBERG

CARLSBERG Brewery (M) Bhd maintains a cautious outlook for this year due to the persevering effects of Covid-19 pandemic and possible government regulations that will impact on-trade sales due to depressed consumer sentiment.

Its MD Stefano Clini said in Malaysia, the second Movement Control Order (MCO 2.0) from January hit recovery in on-trade sales of the brewer.

The seven-week suspension of brewing and distribution during MCO 2.0 has impacted the group’s stock availability.

“The dine-in restrictions severely affected on-trade sales and marketing activations were suspended in adherence to social distancing measures, on top of dampened Chinese New Year celebrations.

“All these have led to a 20% decline in core beer and a 17% decline in our premium beer sales.

“We are hopeful the vaccination plans for Malaysia and Singapore will help contain infections and lead to better economic recovery in the second half of 2021,” Clini said after the group’s 51st AGM in Kuala Lumpur yesterday.

Clini noted the group has put in place numerous measures to mitigate the financial impact of the MCO and preserve cash to stay resilient moving forward.

He added that the group was also disciplined in optimising cost structures aggressively and reallocating investments into viable channels and extending various support to its business partners.

Employees’ wellbeing was prioritised with a safe work environment through strict safety measures, while no salary deductions were made throughout 2020, he added.

Carlsberg’s independent and non-executive chairman Datuk Toh Ah Wah said the board decided early that the group should adopt a defensive stance on its financial position to mitigate the unprecedented impact of Covid-19 on its business.

As such, he said the group suspended quarterly dividend payments for the financial year 2020 (FY20) to ensure a more prudent focus on preserving cash and liquidity, and to strike a balance between the long- term health of the organisations and dividends to shareholders.

For the fourth quarter ended Dec 31, 2020 (4Q20), Carlsberg’s net profit dipped 45% to RM37.95 million from RM68.99 million recorded a year ago.

Revenue during the quarter fell 18% to RM472.54 million versus RM573.92 million previously.

For FY20, the group posted a 44% slump in its net profit to RM162.18 million from RM291.02 million in FY19 while revenue fell 21% to RM1.79 billion from RM2.26 billion in FY19.

Excluding a one-off RM6.4 million settlement with the Royal Malaysian Customs in June 2020 and restructuring costs amounting to RM9.9 million to streamline cashflow and reset its business for a post-Covid-19 environment, its organic net profit would have been RM174.6 million.

Carlsberg declared an interim dividend of 10 sen per share together with a final dividend of 30 sen, to be paid on April 12 and July 9 respectively.

Total declared dividends for FY20 was 40 sen per ordinary share, which represents 75.4% of the group’s FY20 net profit.

At the close yesterday, shares of Carls- berg ended eight sen or 0.34% higher at RM23.92, for a market capitalisation of RM7.31 billion.