SINGAPORE (Nov 10): Multi-industry food company QAF saw its earnings fall 62% to $7.5 million for 3Q17 compared to $19.4 million of earnings a year ago on higher costs and expenses.
Revenue for the quarter remained flattish at $212 million due to its Bakery operations in Singapore/Johor being affected by startup issues in the new Johor plant, as well as lower revenue from the Primary Production segment due to lower selling prices and increased competition.
Its Trading & Logistics business segment achieved overall higher sales and profitability compared to the year before.
Staff costs, however, increased by 8% to $50.1 million over the quarter due to higher AUD exchange rates used to translate Rivalea expenses, as well as higher headcount in the group’s bakery businesses in the Philippines and Australia.
Meanwhile, amortisation and depreciation grew 9% to $8.3 million due to additional bakery production lines and facilities, while advertising and promotion expenses grew by 81% to $4.3 million to due to the launch of new products and increased market penetration by Gardenia Bakeries (Philippines).
Other operating expenses grew 19% to $17.6 million over 3Q due to one-off legal, professional and other expenses related to QAF’s strategic review of its options in relation to its primary production business in Australia.
Looking ahead, QAF expects its performance to continue being affected by a number of factors including competition, currency volatility and rising costs, particularly as a result of increased production activities and new production facilities.
It however expects its Trading & Logistics business segment to record better profitability for FY17 compared to the previous financial year.
Shares in QAF closed 1 cent lower at $1.20 on Friday.
