SINGAPORE (Feb 8): Fraser & Neave has reported earnings of $22.4 million for 1Q17, a 12.1% decrease from the $25.5 million reported in the previous corresponding quarter.
Group revenue for the quarter to December rose marginally to $495 million on higher revenue contributions at its beverages and dairy business segment, offset by the lower revenue at its printing and publishing business.
Beverage revenue rose 5.2% following the acquisition of a vending business in July, the introduction of new products and the distribution expansion in Myanmar and higher pre-Lunar New Year sales of Chang beer.
However, the segment’s pre-tax earnings fell 19.7% on higher raw material costs, higher promotional expenses and a weaker ringgit.
Dairies revenue rose marginally on stronger sales of its yogurt products which led to 5.3% higher pre-tax earnings to $39.4 million on the back of favourable milk-based commodity prices.
Printing and publishing continued to have a challenging quarter as revenue fell 8.3% to $77.3 million, on lower magazine print volumes at its printing business and lower demand of its publishing business. The segment recorded pre-tax losses of $2.3 million, compared with pre-tax earnings of $2.5 million in 1Q16.
F&N says its expects consumer demand in the F&B segment to remain “subdued” but added that it will continue to invest in its Vietnam and Myanmar beverage operations and seek new opportunities in the food segment.
On the other hand, it expects the operating environment for the printing and publishing segment to remain challenging in the near term, and added that it will continue to invest in the digital publishing business, with plans to scale up its distribution business through the acquisition of Penguin Random House in Singapore and Malaysia.
The group did not declare any dividends for the current financial period.
Shares in F&N closed at $2.11 on Wednesday.
