SINGAPORE (Feb 23): QAF, the multi-industry food company, reported a 96% fall in 4Q earnings to $2.1 million from $55.8 million a year ago on absence of one-off gain.
In the 4Q ended Dec, revenue fell 2% to $214.4 million from $217.8 million. The group’s bakery segment saw an overall increase in sales and profitability but revenue for the primary production segment from Rivalea, the group’s Australia-based integrated meat producer, posted lower sales as a result of lower average selling prices on higher competition and an oversupply situation.
Costs of materials also increased by 7% to $117.3 million in 4Q17, mainly attributable to higher flour and other raw material prices and Rivalea’s $2.3 million writedown of biological assets in line with lower market prices.
Group profit before taxation (PBT) decreased by 99% to $0.6 million for 4Q17 from $57.7 million for 4Q16. Excluding the one-off non-cash exceptional gain of $49.7 million for 4Q16 due to the group’s sale of its 20% stake in Gardenia Bakeries (KL), group PBT would have decreased by 92%.
For the FY17, earnings fell 74% to $31.8 million on the back of a 5% fall in revenue to $848.6 million.
In its outlook, QAF says it is exposed to heightened competition in certain markets, risks of volatility in regional currencies and escalating costs especially higher energy and fuel costs in line with higher oil prices as well as higher flour and other raw material prices in certain markets.
The board is recommending a final dividend of 4 cents per share.
Shares in QAF closed at $1.08 on Friday.
