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Fair value gains push up Yeo Hiap Seng's Q2 profits by 66.4%
FOOD and beverage (F&B) manufacturer Yeo Hiap Seng saw earnings swell in the second quarter, supported by fair value and currency gains.
Net profit rose by 66.4 per cent year on year to S$8.75 million for the three months to June 30, according to unaudited financial results out on Wednesday, on a 5.6 per cent increase in revenue to S$92.1 million.
Turnover was up in the core F&B division, which contributes almost all of the group's revenue, while gross profit grew by 8.3 per cent to roughly S$26.1 million. Yeo Hiap Seng attributed the improvement to higher sales in Cambodia and China.
The company registered "higher other gains" as well, on the disposal of plant, property and equipment.
The rise in earnings also came on net fair value gains on equity investments and currency gains, but was partially offset by the absence of a net gain on the liquidation of subsidiaries in the year before.
Earnings per share was 1.51 Singapore cents for the three months, up from 0.91 Singapore cent before, while net asset value dipped to 81.57 Singapore cents a share, against 82.91 Singapore cents as at Dec 31, 2017.
The group said in its outlook statement that it expects F&B margins to remain under pressure in the year ahead "from the weak consumption outlook for our key markets and competitive selling prices", amid fluctuations in raw material prices and regional currencies.
"We will continue to grow our sales with our three-pronged strategy to rejuvenate our brand; grow our food business; and develop our agency business while we launch new products to cater to the evolving and rapidly changing consumer tastes," it said, adding that it will continue to reformulate its drinks "to promote healthier consumption" even as regulators are taking aim at consumers' sugar intake.
No dividend was declared, against a payout of S$0.02 a share for the year-ago period.
For the six months, net profit slid by 93 per cent to S$10.1 million on the absence of the exceptional gain from the divestment from Super Group, although underlying earnings registered a 42.3 per cent improvement. Revenue grew by 8.8 per cent to S$183.9 million.
Yeo Hiap Seng lost S$0.01, or 0.99 per cent, to S$1.00, before the results.