Fraser and Neave Limited (F&N) has reported earnings of $83.4 million for the 1HFY2021 ended March, 16.1% higher than earnings of $71.8 million for the 1HFY2020.
Earnings per share (EPS) for the 1HFY2021 increased to 5.7 cents from 4.9 cents last year on a fully diluted basis.
Revenue for the period increased 2.0% y-o-y to $988.6 million attributable to growth in the group’s overall Beverages and Dairies revenue, and offset by a decline in Printing and Publishing revenue.
Profit before interest and taxation (PBIT) increased 8% y-o-y to $153.3 million.
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Overall Beverages revenue rose 7% y-o-y to $250.3 million due to the higher sales volume at Emerald Brewery, aided by the distribution of functional products and improvement in vending operations in Singapore.
The higher revenue for Beverages on the whole was aided by the improved top-lines in Beer and Soft Drinks.
PBIT for Beverages surged nearly three times to $21.8 million in the 1HFY2021 from $7.6 million in the year before due to higher sales volume, favourable sales mix, favourable input costs and controlled marketing spend.
Dairies revenue increased 1.4% y-o-y to $617.9 million mainly due to Dairies Malaysia on the back of higher contributions from Teapot, F&N and Gold Coin in the domestic market.
Dairies Thailand also contributed to the higher revenue on higher domestic canned milk sales and improved export market sales.
Despite the higher revenue, Dairies PBIT fell 7.9% y-o-y to $128.2 million due to higher provisions for bulk milk, higher freight costs and unfavourable input costs.
Revenue for Print and Publishing fell 8.5% y-o-y to $115.4 million due to the negative impact from the Covid-19 pandemic, which saw cancellation or deferment of print orders and dampened consumer sentiment.
Despite lower revenue this half year, Print and Publishing saw losses reduced to $2.8 million from $11.0 million in the year before largely due to savings from internal cost cutting measures and improved operational efficiency.
For the 1HFY2021, the group has declared an interim dividend of 1.5 cents, same as the year before. Shareholders will receive their dividends on June 17.
As at March 31, cash and cash equivalents stood at $354.4 million.
SEE:F&N marks return to Myanmar's beer market with Emerald Brewery
“In line with the pace of recovery experienced in our markets, we are pleased with the growth recorded in our revenue and profitability for the first-half of the financial year. Our regional footprint, wide portfolio of products, strong distribution network and well-recognised brands contributed to the resilience of our business amid challenging times,” says Koh Poh Tiong, chairman of the board.
“While our first-half results provide reason for optimism, the outlook remains tempered with caution, given the challenges of rising raw material prices and higher freight cost. Furthermore, as the region battles with the resurgence of Covid-19, we expect some lingering and prolonged impact on consumer sentiment and spending behaviour and our F&B business, particularly on the recovery of on-premise business,” he adds.
In the same statement, the group announced its acquisition of the Sri Nona Group of Companies for up to RM60 million ($19 million), which will strengthen F&N’s halal position in Malaysia.
“It creates [an] opportunity for the group to further leverage our strong R&D capability, and builds on our leadership positions to deliver attractive returns in this high growth, convenience and ready-to-eat food sector,” writes the group in a statement.
Shares in F&N closed 1 cent higher or 0.7% up at $1.45 on May 10.
