Food Empire posts 84% jump in Q4 net profit of US$5m

FOOD Empire Holdings on Monday reported an 83.6 per cent jump in net profit to about US$5 million for the fourth quarter ended Dec 31, 2019.

Revenue for the instant coffee and snack manufacturer grew 4.7 per cent to US$73.3 million, with sales increasing in its Russia, Ukraine, Kazakhstan and CIS (Commonwealth of Independent States) markets. Meanwhile, sales in South-east Asia decreased by 5.6 per cent due to the rationalisation of underperforming markets.

Earnings per share were 0.93 US cent for the quarter under review, compared with 0.51 cent a year ago.

For the full year, net profit grew 44.3 per cent to US$26.1 million from US$18.1 million in FY2018. Revenue edged up 1.5 per cent to US$288.6 million from US$284.3 million previously, mainly due to higher sales in local currency terms in the group's key markets.

The gains were partially offset by the lower contribution from the South-east Asia market as well as lower translated revenue resulting from the depreciation of the Russian ruble against the US dollar.

Earnings per share were 4.89 US cents for the full year, up from 3.39 cents in the previous year.

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Commenting on the positive results, executive chairman Tan Wang Cheow said: "The favourable outcome is a testament to the effectiveness of the Group's strategies implemented to address identified problems and improve profitability. Moving ahead, we will remain focused on growing our key markets, streamlining our business operations and looking for strategic mergers and acquisitions opportunities to achieve sustainable growth."

The group does not expect the Covid-19 outbreak to have any direct or significant impact on its plans for the year, despite the substantial uncertainty over the disease's duration and severity.

It plans to continue investing in branding, product development and expanding distribution networks, as well as restructuring business operations to streamline the organisation to be more cost-efficient and sustainable.

Its first non-dairy creamer (NDC) plant is currently fully utilised, with the company planning to construct a second NDC project in Iskandar, Malaysia over the next 24 months.

Food Empire shares closed down one cent or 1.3 per cent to S$0.76 on Monday before the results were announced.