KUALA LUMPUR: Heineken Malaysia Bhd’s net profit increased 4.86% to RM90.47 million in its second quarter ended June 30, 2023 compared with RM86.07 million for the corresponding quarter in the previous year, amidst challenging market conditions leading to a decrease in sales.

Revenue decreased by 11.69% to RM569.24 million as compared to RM644.58 million in the same quarter last year, mainly due to lower sales attributed to weak consumer sentiment driven by rising cost of living and currency volatility.

It had a strong base in the second quarter of 2022 as the market had an upsurge in sales, following the re-opening of the economy and international borders at the start of the endemic phase.

It views this quarter’s performance as a form of market correction. Group profit before tax decreased by 7% alongside lower revenue, mitigated by efficiency gains through cost and value initiatives.

For the six-month period, net profit rose to RM200.40 million from RM199.46 million. Its revenue decreased to RM1.31 billion compared with RM1.34 billion, mainly due to the market correction, buffered by higher sales in the first quarter due to early Chinese New Year festive period in January 2023. In addition, persistent soft market sentiment has impacted the group’s sales performance.

Group PBT declined by 7% due to lower revenue and relatively higher promotional and marketing expenses as it continued to invest behind its brands.

The group declared a single-tier interim dividend of 40 sen per stock unit for the financial year ending Dec 31, 2023 to be paid on Nov 10.

On outlook, Heineken Malaysia managing director Roland Bala shared, “In light of cautious consumer spending due to macroeconomic concerns, we anticipate the market to remain challenging. We will stay agile to the volatile business environment and continue to focus on our EverGreen strategy to future-proof our business.

“We will continue to drive efficiency through cost optimisation across the organisation while investing in our brands and innovations. In the absence of the one-off prosperity tax, we look forward to a positive impact on our group net profit this year.”

With consumer centricity, Roland said, they plan to shape and lead the premium category and continue investing behind their brands besides focusing on cost and value to drive efficiency to enable reinvestments into their brands and business.

“The first half of 2023 remained challenging as the market goes through corrections following a huge rebound in 2022 and weaker consumer sentiments due to macroeconomic concerns. We remained focused on our EverGreen strategy to deliver long-term sustainable and superior growth.”

“We continue to invest behind our strategic brands and innovations and in the first half of 2023, Heineken Malaysia initiated a series of activations to engage and connect with our consumers.

“Our brand Heineken®’s Ghosted Bar campaign won a Cannes Bronze Lion, which is the first time in history that work done from the Apac region on the brand was recognised at the world’s most prestigious marketing and advertising awards.”

He added that they are fully committed to deliver on their ambition to become net zero carbon in their productions by 2030 and the full value chain by 2040.

He said they will also accelerate digital and technology to create a Unified Customer Ecosystem with a customer and consumer-first approach besides promoting a high-performance culture that boosts their strategic capabilities, nurture the best talents, and foster an organisation where people thrive.