PETALING JAYA: Heineken Malaysia Bhd

is expecting a soft market outlook amid continued uncertainty due to geopolitical challenges, particularly in the Middle East crisis and subdued consumer sentiment.

In a filing with Bursa Malaysia, the brewery said these conditions are expected to continue weighing on demand and cost pressures, underscoring the need for sharper focus and execution.

For its first quarter ended March 31, 2026 (1QFY26), Heineken Malaysia’s net profit dropped to RM104.46mil from RM122.15mil in the previous corresponding period, while revenue dipped to RM664.21mil from RM763.63mil a year earlier.

“In the first quarter, the group revenue decreased by 13% year-on-year, mainly due to softer consumer sentiment, alongside a deliberate and proactive reduction of the group’s sales ex-brewery to align with the challenging market dynamics, laying a foundation for stronger underlying momentum going forward.

“Profit before tax and net profit were 15% lower, in line with the reduced revenue base and supported by effective revenue management initiatives and continued cost discipline.”

Commenting on the results, Heineken Malaysia managing director Martijn van Keulen said 1QFY26 performance reflects a more challenging operating environment, with softer consumer sentiment and geopolitical developments that influenced spending patterns.

“We continue to be firmly focused on a targeted consumer-led approach to strengthen our growth fundamentals and further improve our productivity through revenue optimisation and structural cost efficiency.

“While external conditions remain evolving, these actions strengthen our resilience and position us to capture opportunities as market conditions improve, supporting long‑term value creation under our EverGreen 2030 strategy.”

Following the announcement on the transition of Asia Pacific Breweries (Singapore) Pte Ltd to an import-based supply model, Heineken Malaysia said the group’s exports are expected to start in 3QFY26.

“This development supports the Group’s EverGreen 2030 strategy to optimise supply chain capacity, enhance economies of scale and improve operational efficiency.”

Separately, Heineken Malaysia said it commends the Government and enforcement agencies for their continued efforts to stamp out illicit beer, which plays a critical role in protecting legitimate businesses, safeguarding consumer safety and protecting government revenue.

“The beer industry remains a key contributor to Malaysia’s economy, generating RM7.1bil annually, contributing RM3.3bil in tax revenue, and supporting over 52,000 jobs across the manufacturing, logistics, retail and hospitality sectors, based on the latest Confederation of Malaysian Brewers Bhd's Economic Impact Assessment.

“However, illicit beer continues to pose a significant challenge, undermining legitimate operators and eroding government revenue. Industry estimates indicate that around 25% of the beer market is illicit, resulting in an estimated RM1.2bil in annual tax revenue losses to the Government.”

In light of ongoing geopolitical and economic uncertainties, Heineken Malaysia said it is emphasising the importance of a stable excise environment.