Heineken Malaysia tumbles as Q2 profit plunges nearly 40%

 Slumping demand from beer drinkers has cratered the sales of the Dutch brewer in Malaysia.

Heineken Malaysia Bhd posted its weakest quarterly result in nearly five years as its Q2 FY2026 net profit collapsed 39% to RM50.53 million. (Heineken Malaysia pic)

PETALING JAYA:

The shares of Heineken Malaysia Bhd fell to its lowest since late 2023 after its second quarter net profit slumped almost 40% as demand from beer drinkers fell dramatically.

The disappointing results, which met just one-third of the consensus full-year earnings forecasts, prompted several research houses to downgrade the stock.

The shares fell as much as 11% or RM2.10 to RM17, a level last seen in December 2023. It closed at RM17.10 or 10.5% lower, valuing the Dutch multinational brewer’s locally listed unit at RM5.17 billion. The stock has fallen 25% year to date.

The sell down also impacted Carlsberg Brewery Malaysia Bhd, which fell as much as 6.4% or RM1.02 to RM14.86, its lowest level in nearly 10 months.

Heineken Malaysia posted its weakest quarterly performance in nearly five years as “softer consumer demand and continued inventory normalisation” across its customers and distributors dragged down sales.

For the second quarter ended June 30 (Q2 FY2026), net profit collapsed 39.12% to RM50.53 million from RM83 million a year earlier while revenue fell 19.4% to RM434.75 million from RM539.73 million, according to its exchange filing yesterday.

This was the group’s lowest quarterly net profit and revenue since Q3 FY2021, when it posted earnings of RM51.02 million and revenue of RM389.85 million.

For the first half of FY2026, its net profit dropped 24.45% to RM154.99 million from RM205.15 million a year earlier while revenue fell 15.7% to RM1.1 billion from RM1.3 billion.

The group declared a single-tier interim dividend of 40 sen per share.

“Amid softer consumer demand and inventory normalisation in the first half of 2026, we remained focused on strengthening the foundations of the business for long-term growth,” managing director Martijn van Keulen said in a statement.

Meanwhile, TA Securities said it expects demand recovery to remain gradual amid a structural shift in consumption towards off-trade channels and continued “cautious consumer spending” in the prevailing economic environment. The research firm also downgraded the stock to “hold”.

Hong Leong Investment Bank said the muted volume outlook for brewers in 2026 is largely understood by investors, with sector valuations now trading mostly below the five-year average.

It noted the consumption boost during the recent FIFA World Cup is expected to be “relatively modest compared to other previous tournaments” amid the less favourable late-night and morning viewing hours in Malaysia.

However, the bank is keeping its “buy” call on Heineken Malaysia due to potential upside in 2027 as its sister company in Singapore fully transitions to importing supply.

Heineken Malaysia’s parent company announced in March that its manufacturing operations in Singapore will be phased out, and production will shift to Malaysia and Vietnam, likely by the third quarter of 2027. - FMT