SINGAPORE (Feb 23): Yeo Hiap Seng saw its earnings fall 25.6% to $7.7 million in 4Q17 from $10.3 million in 4Q16 on lower revenue.
The latest set of results brings the group’s earnings for FY17 to $153.7 million, surging more than fivefold from its FY16 earnings of $29 million due to one-off gains on disposal of investment in Super Group, among other subsidiaries.
Revenue for 4Q17 fell 8.2% to $84 million from $91.5 million in 4Q16 due to lower contributions from the food and beverage (F&B) division, which the group attributes to general market weakness, competitive pricing, and sales disruption in Cambodia resulting from Yeo Hiap Seng’s transition to new distributors.
Overall, the F&B division contributed to a $0.94 million decline in segment profit from that of FY16 on the back of lower net profit.
Fair value gains on investment properties also fell by $3.94 million compared to the year before.
As at end 2017, cash and cash equivalents increased to $294.9 million from $92.2 million as at end-2016 due to proceeds from the disposal of Super Group and the group’s other subsidiaries in Hong Kong and China, as well as cash generated from operating activities.
Trade and other receivables and loan to subsidiaries fell to $108.3 million from $79.65 million as at end-2016 due to lower accruals.
A final cash dividend of 2 cents per share has been proposed for FY17, unchanged from the previous year.
In its outlook, Yeo Hiap Seng says it expects F&B margins to remain under pressure from the weak consumption outlook for its key markets and competitive selling prices, while fluctuations in raw material prices and regional currencies will also impact the F&B results.
Loooking ahead, the group intends to grow its sales with a three-pronged strategy to rejuvenate its brand, grow its food business, and develop its agency business while it launches new products while continuing to enhance operational efficiencies, mitigate risks from market fluctuations and make improvements on a continuous basis.
With regards to the Singapore government’s drive to promote lower sugar consumption, the group says it has over 60% of its beverage products qualifying as ‘healthier choice’ alternatives and will continue to reformulate its beverage products to promote healthier consumption.
Shares in Yeo Hiap Seng closed 2 cents higher at $1.22 on Friday.
