F&N nine-month net profit up 10.4% at S$130.6 million despite revenue drag

[SINGAPORE] Food and beverage company Fraser and Neave (F&N) reported a 10.4 per cent rise in net profit before exceptional items to S$130.6 million for the nine months ended Jun 30.

This is compared with S$118.2 million in the corresponding period a year ago. The improved earnings is supported by higher profitability and stronger contributions from its associate Vinamilk.

Revenue for the nine months fell 6 per cent to S$1.7 billion from S$1.8 billion, affected by foreign exchange translation headwinds and geopolitical disruptions affecting cross-border trade in Thailand.

Profit before interest and tax (PBIT) rose 13.6 per cent year on year to S$266.9 million from S$234.8 million, with PBIT margin expanding by 276 basis points to 16 per cent.

Earnings per share stood at S$0.09 a share for the nine-month period, up 11.1 per cent from S$0.081 a share in the year-ago period.

Revenue for the group’s core food and beverage segment declined 7 per cent to S$1.46 billion. Within beverages, soft drinks recorded continued growth, offset in part by lower beer revenue due to unfavourable forex translation following changes in accounting treatment.

In the dairies division, softer demand in Thailand stemming from geopolitical disruptions along the Thailand-Cambodia border weighed on export sales. This was cushioned by resilient performance in Malaysia from the School Milk Programme and increased hotel, restaurant and cafe sales, as well as new product launches in Singapore.

Dairies earnings were also supported by a higher contribution from Vietnam’s Vinamilk, following an increase in F&N’s stake in the company to about 25 per cent from 20.4 per cent.

Meanwhile, revenue for the publishing and printing segment grew 2 per cent, supported by the education and print segments alongside recurring orders from its sustainable packaging business. The segment’s PBIT turned around, narrowing losses on higher sales and disciplined cost management.

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Separately, F&N noted that it completed its investment in New Zealand-listed wellness company Comvita on May 18, acquiring a 20 per cent strategic stake for about S$15 million to strengthen its health and wellness portfolio.