Food Empire Q3 net profit falls 30.6% to US$15.7 million

MAINBOARD-LISTED Food Empire Holdings on Wednesday (Nov 8) posted a 30.6 per cent decline in net profit to US$15.7 million for its third quarter ended Sep 30.

This is down from US$22.6 million in the corresponding year-ago period.

The decrease in net profit was attributed to the absence of a one-off gain of US$15 million from the disposal of a non-core asset in Q3 2022, said the instant coffee manufacturer in a business update, though it added that this was partly offset by better operating profits and lower foreign-exchange losses.

Revenue for the quarter fell 1.6 per cent year on year to US$106.8 million from US$108.6 million. This was mainly due to lower contributions from the group’s Russia segment resulting from the depreciation of the Russian ruble, the group said.

It noted that all core markets including Russia had otherwise recorded higher revenue in local currency terms. Higher contributions from the group’s Vietnam and Kazakhstan segments, as well as its coffee manufacturing plants in India, also helped to offset the lower contributions from the Russia segment.

Operating profits rose 38.2 per cent to US$19.7 million for the quarter, up from US$14.3 million a year ago.

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For the nine-month period ended Sep 30, net profit fell 14.8 per cent to US$42.3 million, from US$49.6 million in the year-ago period. Revenue came in 6.7 per cent higher at US$305.1 million, due to increased volumes and higher pricing from all of the group’s core markets.

Food Empire noted that the group is performing well in all its core markets and will continue to invest in strengthening its market position. However, it remains cautious as the global geopolitical situation continues to evolve, on top of facing currency volatility in all its key markets. “Despite higher raw material cost, we expect profitability to be maintained going forward,” Food Empire said.

Shares of Food Empire closed at S$1.08 on Wednesday, down S$0.01 or 0.9 per cent, before the results announcement.