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Food Empire swings back into the black for Q4

Wednesday, March 1, 2017 - 08:55

FOOD Empire Holdings reported on Wednesday a swing back into the black for the fourth quarter ended December 31, 2016.

Net profit for Q4 was US$2.9 million, compared to a net loss of US$3. 2 million a year ago. Revenue grew 11.4 per cent to US$70.0 million.

For the full year 2016, the group recorded a higher net profit of US$14.5 million, compared to US$210,000 in FY2015, thanks to more favourable exchange rates and better performance in key markets as a result of higher selling prices. This was partially offset by share of losses from its associate company, Caffebene Co Ltd, which was acquired in Q1 2016. Revenue for FY2016 was US$242.2 million, up 4.2 per cent from a year ago.

In FY2016, sales in the group's largest market, Russia, increased marginally by 0.6 per cent to US$107.9 million. Sales in Indochina market increased by 36.2 per cent to US$40.1 million on higher sales due to wider distribution channels, aggressive advertising and promotion activities.

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Looking ahead, Food Empire said currencies of its key markets remain vulnerable to the volatility in global oil prices, which "may positively or negatively impact the group's financial performance".

It is confident of replicating its successful business model in Indochina to deepen penetration in its existing markets, as it continues to lookout for opportunities to expand into new geographies. In line with its strategy to further diversify its product portfolio, the group has begun efforts to move towards premium coffee products as well as expand its snacks offerings.

It upstream projects, which include the non-dairy creamer plant and the instant coffee plant in India, as well as its snacks manufacturing facility in Malaysia, are currently all profitable.

"The group will continue to step up the production of its upstream projects to reap greater economies of scale and improve profitability,'' Food Empire said.

It has proposed a first and final dividend of 0.60 US cents.

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