Food and beverage (F&B) manufacturer Fraser and Neave (F&N), an associate of Thai Beverage (ThaiBev), has reported earnings of $68.5 million for the 1HFY2022 ended March.
The half-year period’s earnings stood 17.9% lower than the earnings of $83.4 million in the corresponding period the year before.
The lower earnings were due to higher raw material and energy costs, as well as an exceptional charge of $7.8 million. The charge was due to the impairment of inventories and property, plant and equipment caused by flash floods in Malaysia earlier in the FY.
Earnings per share (EPS) for the 1HFY2022 stood at 4.5 cents on a fully diluted basis after exceptional items, down from the 5.7 cents in the same period before.
F&N’s revenue for the 1HFY2022 increased by 2.2% y-o-y to $1.01 billion due to revenue growth in the group’s F&B division and higher selling prices. The revenue growth overall was, however, dragged by lower dairy volumes and unfavourable foreign currency translation
The profitability of the dairies were also more heavily impacted by high input costs.
See also: Trump wins Republican nomination, setting up rematch with Biden
The group’s topline was also impacted by the lower revenue in the publishing and printing (P&P) segment, which saw softer textbook adoption. The difference in timing in the sales of international textbooks and lower print volumes from China also led to the earnidivngs drag.
1HFY2022 cost of sales increased by 8.2% y-o-y to $724.2 million.
As a result, gross profit for the period fell 10.5% y-o-y to $285.8 million.
Profit before interest and exceptional items (pbit) fell 17.16% y-o-y to $127 million.
As at March 31, the group’s net gearing ratio rose to 16.7%.
For the period, F&N has declared an interim dividend of 1.5 cents per share, unchanged y-o-y. The dividend will be paid out on June 6.
“The soft start to FY2022 was not unexpected, given the challenges many industries are now facing worldwide. Raw material shortages, costs inflation, supply chain disruptions and rising energy prices have impacted our financial performance, with attributable profit declining 18 per cent. While uncertainty remains as to the direction of raw materials and energy prices, our performances in the past couple of years have demonstrated the resiliency of our business. F&N will continue to act proactively to navigate this volatile and inflationary environment, and take deliberate steps to further enhance our resiliency,” says Hui Choon Kit, CEO of F&N.
He adds, “The outlook for the F&B industry remains bright. We believe the easing of the pandemic restrictions in Southeast Asia will pave the way for a revival of economic activity and release pent-up demand. We expect the F&B industry to enjoy a brighter outlook in the near future. At F&N, we will remain focused on accelerating innovation and driving operational efficiency, commercial excellence and fiscal discipline across our value chain. We will also continue to make investments in support of our strategic growth initiatives, including seeking bolton acquisitions to complement and strengthen our capabilities and market presence.”
Shares in F&N closed flat at $1.36 on May 6.
