What can we expect from CarlsBerg in 2010 ??

Let assume the buy over of Carlsberg Singapore run smoothly and the crunching of estimated figures are as follows :-
On assumption profit for years 2009 & 2010 remain the same as in 2008 for Carlsberg (M) & Carlsberg (S)……..

Total acquisition = RM 370m
Carslberg (M) Cash Balance = RM 231m
Borrowings to finance the acquisition = RM 150m
Gearing ~ 150/370 = 0.4 times (acceptable to me)
***Note : Borrowings may not occur as it may accumulate sufficient fund before 2009 end.

Carlsberg (M) Net Profit (Year 2008) = RM 76m
Singapore to contribute est 50% net profit to Carlsberg (M) in 2010
= 76 + (76 * 0.5) = RM 114 m

Conservatively 50% of the net profit will be used to pay dividend = 114/2 = RM 57m

1000units holding of Carlsberg will get a dividend of = 57m/308m = RM185

This represent a dividend percentage of = 185/4600 x 100 = 4% for year 2010 still better than 2009... :)

EPS = 114m/308m = 37sen

PE = 4.6/0.37 = 12sen (Not bad)

Compare to its peer GUINNESS stood at PE 14sen.

Fair value for Carlsberg (M) = 14 x 0.37 = RM5.18 ... :)

Beside what you get for above, do consider the following cost saving measure as well :-

1) The operational synergies where it would shift sourcing back to Carlsberg (M).
2) Advertising and promotions would enjoy double tax deduction.

I own some Carlsberg shares while writing this, join me if you want…. :)