News Column

AmResearch upgrades Carlsberg to `hold'

February 24, 2014

AMRESEARCH has upgraded its rating on Carlsberg Brewery (M) Bhd from "sell" to "hold" with a higher fair value of RM13.80 per share, compared to RM11 per share previously, following the announcement of its better-than-expected FY13 results.

"Carlsberg's full-year results have outperformed both our and consensus forecasts by about 10 per cent. The group reported a fourth quarter FY13 net profit of RM64 milliion, which lifted its FY13 earnings to RM184 million."

AmResearch said the positive variance can be attributed to stronger sales in the fourth quarter from successful marketing campaigns during the year-end festivitiesm as well as pre-budget loading activities.

Together with cost-efficiency programmes and a lower effective tax rate, its fourth quarter FY13 earnings grew by a larger quantum of 67 per cent on the back of its 11 per cent revenue growth.

Carlberg's FY13 revenue and net profit declined by two per cent and four per cent, respectively. The commendable performance of its Malaysian operations was negated by lower contributions from its wholly-owned Singapore subsidiary Carlsberg Singapore and Sri Lanka associate Lion Brewery.

Faced with a mature domestic malt liquor market and expectations of weak consumer spending in FY14F, the management aims to harness the power of innovation in both products and processes to expand market share and drive earnings growth.

The group declared a final and special single-tier dividend of 56 sen per share. Total gross dividend per share for the year of 61 sen per share was a tad below FY12's 63 sen per share.

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Source: Business Times (Malaysia)

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