SINGAPORE (Apr 27): Drink manufacturer Yeo Hiap Seng saw its 1Q18 earnings decline to $1.4 million from $140 million a year ago.
The lower earnings compared to that of 1Q17 was largely due to a one-off $138.35 million gain on disposal of investment in Super Group, which was recorded in the corresponding quarter last year.
Group revenue for the latest quarter grew 12.1% to $91.8 million from restated 1Q17 revenue of $81.9 million, mainly due to higher sales booked over Chinese New Year during the period.
In particular, the F&B division recorded an improvement in segment profit of $1.03 million in the current quarter.
This was mainly due to a higher gross profit of $2.15 million, which was partially offset by higher administrative expenses of $1.11 million which was partly contributed by Yeo Hiap Seng’s commencement of its Cambodia backend operations.
Yeo Hiap Seng says that it expects its F&B margins to remain under pressure over the next 12 months due to a weak consumption outlook for its key markets, in addition to competitive selling prices and fluctuations in raw material prices and regional currencies.
Nonetheless, the group says it will continue to grow its sales with a three-pronged strategy to rejuvenate its brand, grow its food business, and develop its agency business as it launches new products to cater to consumer tastes.
On the operational front, it intends to continue to enhance operational efficiencies, mitigate risks from market fluctuations and make improvements on a continual basis.
Shares in Yeo Hiap Seng closed 2.7% at $1.15 on Friday.
