Food Empire not facing any going concern issues from Russia-Ukraine conflict

FOOD and beverage manufacturer Food Empire said it does not foresee any going concern issues stemming from the Russia-Ukraine conflict.

In an update on Wednesday (Mar 2), the company said that operations and sales activities in Ukraine have been suspended. The primary concern of Food Empire is for the safety and well-being of its staff, with no reported damage to equipment or properties so far.

"However, based on the Group's past experience, in the absence of a massive or permanent change in demographics, consumer demand for food and beverages is likely to remain resilient as they are essential products," said Food Empire.

In Russia, Food Empire's biggest market, the economic sanctions may have broad implications which are still unclear to the company right now. Russia's central bank is acting to stabilise the banking system and a number of large local lenders are excluded from the sanctions list, the company noted.

Sanctions are being targeted at the Russian government, banking industry and other sensitive sectors like technology and energy. However, essential sectors like F&B are unlikely to face demand destruction, according to Food Empire.

"Hence, the group remains optimistic about its long-term prospects in Russia."

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The company also said it has an experienced management team and a strong balance sheet, adding that it will be actively assessing the impact of the conflict on the business and will roll out measures to mitigate any fallout in affected markets.

"We are working closely with our business heads, partners and banks to understand the issues and will release further announcements to update shareholders at the appropriate time," it said.

Shares of Food Empire closed S$0.02 or 4.4 per cent higher at S$0.47 on Wednesday.

Read more:

• Russia-Ukraine tension overshadows Food Empire's results; net profit dips 27.2%

• Food Empire perks up for instant (coffee) success

• Food Empire's net profit halved to US$3.1m in Q3 on higher commodity, freight costs