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Dairies earnings lead F&N's 24% net profit increase for FY19

CONSUMER group Fraser and Neave (F&N) on Thursday posted a 23.5 per cent increase in net profit to S$152.6 million for FY19, due to higher contributions from its beverages and dairies segments.

Earnings before interest and taxes (Ebit) for the beverages segment increased multifold from S$400,000 in FY18 to S$6.7 million in FY19, on the back of higher sales, lower sugar prices, and lower manufacturing overheads and marketing spend, while Ebit for the dairies segment rose 19.3 per cent to S$275.5 million due to higher profit contribution of about S$118 million from Dairies Thailand, and a higher profit share of about S$111 million from its Vietnam diary products joint stock company, Vinamilk.

For the 12 months ended Sept 30, revenue rose 3.7 per cent to S$1.9 billion.

The higher revenue was driven by increased contributions from its beverages and dairies segments - beverages revenue of S$470.7 million was 6.5 per cent higher than last year, thanks to successful festive campaigns and the continued roll-out of new healthier products in F&N's core markets of Malaysia and Singapore, while dairies revenue rose 3.6 per cent to S$1.2 billion, thanks to Dairies Thailand as a result of its successful execution of marketing and branding campaigns for both domestic and export markets, supported by capacity expansion. 

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Only the printing and publishing arm saw a slight revenue decline of 0.6 per cent to S$277.4 million, after the maiden contribution from Print Lab, an acquisition this year, and the improved distribution sales cushioned the decline in other units.

Earnings per share rose to 10.6 Singapore cents from 8.5 cents a year ago.

The company's directors have proposed a final dividend of four cents per share. Together with the interim dividend of 1.5 cents per share paid in June 2019, the total dividend for this year amounted to 5.5 cents, an increase of one cent over the prior year. 

If approved by shareholders at the annual general meeting on Jan 29 next year, the final dividend will be paid on Feb 18, 2020. 

F&N shares ended at S$1.70 on Thursday, up one cent.