SINGAPORE (Feb 11): Fraser and Neave (F&N) saw its earnings rise 47.5% to $37.9 million for the 1Q19 ended December, from $25.7 million a year ago.
The increase was largely due to robust performance from the group’s Dairies business as well as higher profit contribution from Vinamilk, F&N’s associate company in Vietnam.
1Q19 revenue inched 0.4% higher to $464.4 million, from $463.5 million a year ago, on higher dairy and soft drinks sales in its core markets of Malaysia, Singapore and Thailand.
However, the better performance in Food & Beverage (F&B) was partly offset by lower revenue in Publishing & Printing due to lower print and distribution volume for magazines and timing differences in the publication of business directories.
Despite the marginal sales growth, F&N saw its profits surge on the back of lower input costs for milk-based commodities, sugar and palm oil. Consequently, profit at Dairies Malaysia and Dairies Thailand rose 74% and 31%, respectively.
Share of associated companies’ profits rose 39.3% to $23.7 million in 1Q19, from $17.0 million a year ago.
As at end December, cash and cash equivalents stood at $323.5 million.
Looking ahead, F&N says consumer sentiments in the F&B segment is expected to remain challenging with continuing competition as well as volatility in foreign currency movements and commodity prices.
It adds that it is awaiting further details on a sugar tax in Malaysia starting April, which was announced in the Malaysian Budget 2019, and will assess and closely monitor its impact on the group.
“In the meanwhile, we are prioritising efforts to accelerate innovation and the development of new product offerings,” F&N says in a filing to SGX on Monday. “The group will also continue to pursue new investment opportunities to further grow its beverages and dairies businesses.”
Shares in F&N closed flat at $1.70 on Monday.
