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Malaysia. Guinness Anchor boosts profit by 19.3% through cost reduction

Guinness Anchor Bhd (GAB) boosted its second-quarter (Q2) net profit to RM90.84mil, up 19.3% from a year earlier, mainly by improving its cost-efficiency.

The brewer told Bursa Malaysia that during the three months to Dec 31, 2015, it phased certain brand advertising and promotion investments, which will take place in the coming months. The company also achieved higher sales to retailers.

GuinnessDespite higher sales driven by the Chinese New Year sell-in (sale to retailers), GAB’s revenue growth was marginal at 0.7% to RM524.55mil. “The underlying growth was partially off-set by the replacement of sales tax by the goods and services tax,” it explained.

GAB managing director Hans Essaadi said in a press statement: “Profit in the last quarter was largely due to our strategic commercial initiatives and taking the ongoing cost management practices to the next level. The excellent anti-contraband work carried out by the Government also helped our bottom line.”

However, he said GAB remained cautious in the year ahead despite favourable growth.

“We are confident GAB’s strong fundamentals will continue to help us maintain our leading market position in Malaysia. However, we are concerned that consumer sentiment may remain weak in 2016 in a challenging and changing environment,” he said.

“In view of the challenging year ahead, we will continue to focus on delivering key strategies for the financial year, whilst staying agile to face the changing environment. Backed by a resilient first six months performance, we remain cautiously optimistic about delivering a good performance for FY2016.”

Its half-year net profit rose by 17.% to RM153.94mil on 1.7% higher revenue of RM929.55mil.

In this challenging environment, GAB said, it strived to be innovative in its offerings.

In the last six months, the company launched four new variants -- Tiger White, Smirnoff Ice Black and limited edition offerings, Tiger Radler Mandarin Orange and Strongbow Red Berries. A limited edition packaging, Heineken Spectre, was also introduced.

On Nov 25 last year, GAB changed its financial year from June 30 to Dec 31. As a result, the financial statements for 2016 will be for a period of 18 months, beginning July 1, 2015 and ending Dec 31, 2016.

GAB, which is celebrating its 50th anniversary this year, has declared a special dividend of 30 sen per 50-sen share to commerate the occasion, on top of the interim dividend of 20 sen for this financial year. The dividend is payable on April 15.

GAB shares closed 10 sen higher at RM13.08 on Tuesday.

20 Jan. 2016

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