F&N full-year earnings down 11.1% to S$124.9m despite higher revenue

BEVERAGE and publishing company Fraser and Neave : F99 0% (F&N) on Thursday (Nov 10) announced an 11.1 per cent drop in net profit to S$124.9 million for the financial year ended Sep 30, from S$140.4 million the year before.

This comes despite the company recording a 6.6 per cent year-on-year increase in revenue to S$2 billion from S$1.9 billion, it said in a bourse filing.

Revenue growth was fuelled by its beverages segment, which was lifted by higher beer and soft drinks volumes, higher selling prices and a strong performance in the second half of the financial year, when beer sales almost doubled amid a number of successful promotion campaigns and new product launches.

Revenue from its dairies rose 1 per cent due to the easing of lockdown measures, price adjustments, effective promotions and loyalty programmes.

However, its publishing and printing revenue fell, mainly due to a poor first-half performance as a result of Covid-19 restriction measures.

Earnings per share stood at 8.6 cents for the full year, down from 9.7 cents the year before.

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F&N said the outlook for the food and beverage (F&B) industry for the next 12 months looks cautiously optimistic, although headwinds such as persistent inflationary pressure and a possible recession could dampen consumer spending.

To strengthen its business, the company acquired Ladang Permai Damai, which is principally engaged in the cultivation of oil palm, processing of fresh fruit bunches and marketing of crude palm oil, palm kernel and fresh fruit bunches.

The company also completed the privatisation of Cocoaland Holdings in Malaysia; Cocoaland is a manufacturer of sugar confectionery products such as fruit gummies, candies, chocolate, wafers and snacks. These acquisitions, together with its recent capital expenditure, will enable it to provide new product offerings, among other things.

In Singapore, F&N will consolidate its F&B operations into its new purpose-built factory and logistics hub in Tuas, which will make its operations more efficient and enable it to scale up.

F&N’s board is recommending a final dividend of 3.5 cents per share. Together with the interim dividend of 1.5 cents per share paid on Jun 6, this brings the total full-year dividend to 5 cents per share, the same as last year.

If approved by shareholders, the final dividend will be paid on Feb 10, 2023.

Shares of F&N closed at S$1.21, up S$0.02 or 1.7 per cent, before the results were announced.