F&N posts 4.6% rise in Q1 net profit to S$39.7m on higher revenue

FRASER & Neave (F&N) on Thursday saw first-quarter net profit rise 4.6 per cent to S$39.7 million on the back of higher revenue across all segments, but warned of continued competition as well as volatile material prices. 

Revenue for the quarter ended Dec 31, 2019 was up 8.8 per cent year-on-year to S$505.2 million, lifted by better showing in all segments including beverages, dairies, and printing and publishing. 

Dairies, the group's largest contributor to revenue, saw revenue increase 9.9 per cent to S$308 million on the back of branding and customer loyalty campaigns, and the launch of new Teapot variant products in Thailand. 

Likewise, beverages revenue gained 9.9 per cent to S$124.5 million, mainly due to contribution from F&N's Emerald Brewery in Myanmar which started commercial operations. Sales of soft drinks ahead of the Lunar New Year festive period, particularly in Singapore and Malaysia, also contributed to the revenue growth. 

The printing and publishing arm also posted better performance, with revenue rising 2.7 per cent to S$72.6 million. Contributions from Print Lab and hallmark distribution had helped offset the decline in other units. 

Earnings per share stood at 2.7 Singapore cents, up from 2.6 cents previously. 

In its outlook, F&N said it continues to face competition and volatility in raw and packaging material prices. Other challenges come from governments' drive to reduce sugar consumption, and weak consumer sentiment. 

"The recent outbreak of the coronavirus has added further uncertainty," the group added. 

Management noted, however, that F&N is seeking to collaborate with overseas and e-commerce companies to expand and intensify distribution coverage.

New, healthier product offerings and new product innovations are also in the pipeline to increase F&N's presence in healthier product categories and maintain its standing in its core categories.