F&N's net profit for Q1 up 16.3%, due to contribution from associate company

FRASER and Neave (F&N) posted a net profit of S$26.1 million for the first quarter ended Dec 31, 2017, up 16.3 per cent from a year ago, due to strong performance from the group's associate company, Vietnam Dairy Products Joint Stock Company.

Revenue slid 1.6 per cent to S$487.1 million, impacted by a 16 per cent dip in revenue in its beverages segment.

The decline in soft drink sales was attributed mainly to Malaysia, due partly to competitive pricing pressures and the absence of contribution from Chinese New Year sales owing to the earlier sell-in booked in 1Q2017.

In Singapore, certain soft drinks segments were also negatively affected by campaigns against diabetes, while sales in new markets were impacted by challenges faced in the route-to-market.

Earnings per share stood at 1.8 Singapore cents up from 1.5 cents previously. No dividend was declared for the quarter.

Looking ahead, the group said that contribution from its associated company, Vinamilk, is expected to increase as the group will factor in the results of Vinamilk for the full 12 months in this new financial year.

"We will continue to invest in new markets and at the same time strive to maximise the benefits of capex projects and harmonised distribution network," said the group.

The group said that it will continue to pursue new investment opportunities to further grow its beverages and dairies businesses.

As a result of restructuring activities undertaken by the printing and publishing business over the past year, the group expects losses to continue to narrow in the new financial year.

"Publishing will continue to invest in its digital business and overseas markets by leveraging on its strength in the education content segment. The group will continue to ensure that the cost structure remains sustainable, while at the same time explore opportunities to enter into new business segments," added F&N.

In a separate announcement, F&N said that the group had successfully raised its shareholding in Vinamilk from 18.7 per cent to 19.2 per cent this quarter, in a series of open market purchases.