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Food Empire profit up 34.4% to US$7.9 million in Q3

FOOD Empire, which manufactures instant coffee and snacks, has posted a net profit of US$7.9 million in the third quarter, up 34.4 per cent from the same period a year earlier on sales growth in Russia, Ukraine and IndoChina.

Revenue in the three months ended Sept 30 rose 5.4 per cent to US$76.8 million, partially offset by lower contributions from the rationalisation of underperforming businesses.

Executive chairman Tan Wang Cheow said in the results filing on Monday: “We remain on track to implement our multi-year plan to strengthen the group by focusing on sustainable growth through organic initiatives and pursuing M&A (merger and acquisition) opportunities. Meanwhile we are continuing efforts to rationalise our underperforming businesses, streamline operations and consolidate our group structure."

The group expects business to "remain resilient" even as the global economy is projected to grow at a slower pace for the remaining part of 2019 as a result of continuing trade tensions between the US and China.

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However, the group may face currency volatility in core markets such as Russia, Ukraine, Kazakhstan and CIS (Commonwealth of Independent States) countries, which could impact its future results, it said.

Food Empire said the construction of its second coffee plant in India is on track and trial production is expected to commence in early 2020: "The group will focus its efforts to ensure its timely commissioning."

Third-quarter earnings per share was 1.47 US cents, up from 1.10 US cents in the third quarter last year.

Net asset value per share was 37.22 US cents, up from 33 US cents as at Dec 31 last year.

Food Empire shares closed flat at S$0.54 on Monday before results were released after market close.