World Cup drives Guinness’ 4Q profit

World Cup drives Guinness’ 4Q profit
Tags: fourth quarter | GAB | world cup

Written by Yong Min Wei
Thursday, 05 August 2010 12:03

KUALA LUMPUR: Guinness Anchor Bhd’s (GAB) net profit for the fourth quarter ended June 30, 2010 (4QFY10) rose 30.2% to RM35.66 million from RM27.39 million a year earlier, boosted by higher sales from commercial activities during the 2010 FIFA World Cup.

The leading brewer’s revenue climbed 11.7% to RM308.71 million from RM276.27 million, while basic earnings per share (EPS) came in at 11.81 sen versus 9.07 sen previously.

GAB proposed a final dividend of 35 sen per 50 sen share (tax exempt) under a single-tier system for the year ended June 30, 2010, bringing total dividend for the year to 45 sen. Its net asset per share stood at RM1.56 as at June 30.

For FY10, the group reported a record RM1.35 billion in revenue versus RM1.28 billion in FY09 while full year pre-tax profit rose 7% to another record of RM205.33 million from RM191.91 million. Net profit rose 7.5% to RM152.69 million from RM141.99 million, while EPS rose to 50.54 sen from 47 sen.

GAB managing director Charles Ireland said the group had achieved nine consecutive years of growth in revenue and profit. He said the group’s market share in the malt liquor market (MLM) had been improving every year and that it was currently controlling close to 60% share compared with the low 40%-plus levels five years ago.

“This track record really does show what an exceptional blend of people, brands, and performance we have in GAB,” he told a press conference yesterday.

“It is fitting that in the year of the tiger, Tiger beer is leading our growth. Guinness, Heineken, Kilkenny and Anchor also continue to contribute to our good performance,” Ireland said.

He said one of GAB’s core strengths was in its portfolio of international brands, adding the management had substantially invested in building brand equity to strengthen its value proposition to consumers.

He said GAB would be introducing a new range of products in the MLM market in the next six months but was tight-lipped on the number and origin of products except that they involved beer and stout.

Nevertheless, Ireland noted that the MLM was sensitive to overall economic conditions and excise duties although the group was optimistic that it would perform satisfactorily in FY11.

“As Malaysia has the second-highest excise duty on alcoholic products in the world, the industry hopes there will be no increase in excise duties in the coming Budget 2011,” he said.

On capital expenditure (capex), Ireland noted GAB spent in the region of RM40 million in FY10 and that it was expecting to spend about RM50 million in FY11, the bulk of which would be invested to supply the “highest quality” beer and stout as well as to ensure its brewery conformed to international standards of production.

GAB’s share price yesterday added eight sen to close at RM8.10 with 16,200 shares traded.


This article appeared in The Edge Financial Daily, August 5, 2010.