F&N Q1 net profit down 10.9% to S$40.2m

BEVERAGE and publishing company Fraser and Neave F99 saw net profit fall 10.9 per cent to S$40.2 million in the first quarter ended Dec 31, 2021, despite a 1.6 per cent increase in revenue.

In a business update on Thursday (Feb 10), the company better known as F&N attributed the revenue bump - from S$497 million in the year-ago period to S$505 million - to higher demand for beer and soft drinks.

The company said its profit after tax for the quarter was hit by higher finance costs due to the issuance of a S$100 million 5-year term bond at the end of the last financial year to prepare for the refinancing of a bond due March 2022.

It also incurred S$8.1 million in exceptional items, mainly from impairment of inventories and property, plant and equipment as a result of flash floods in Malaysia.

Earnings per share for the quarter stood at S$0.028.

In terms of its product lines, beer brought in higher revenue due to improved route-to-market while recovery in general retail and food services boosted soft drink sales, it said.

Beer profits more than doubled, but earnings from soft drinks grew only marginally due to higher input costs. Earnings from dairy products fell 16 per cent due to "higher input costs and unfavourable foreign currency translation", it said.

Earnings from its printing and publishing business declined marginally on higher input and utility costs, F&N added.

In terms of geography, revenue growth was largely supported by higher sales in Singapore, while Thailand and Vietnam remained top profit contributors, it said.

The company's borrowings stood at S$952.8 million and its gearing ratio at 13.7 per cent for the quarter. This gives it "generous debt headroom for acquisitions", it said.

F&N shares ended Thursday up 0.71 per cent or S$0.01 at S$1.41.