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Full-year net profit at F&N plunges 90.5% without one-off gains

HIGHER finance costs and the absence of a one-off gain put a dent in Fraser & Neave's (F&N) earnings for the 2018 fiscal year.

Net profit for the year ended Sept 30 plunged 90.5 per cent to S$122.2 million, in the absence of a $1.2 billion fair value gain recognised last year when F&N started to equity account its share of Vinamilk’s profit in April 2017. F&N owns 20.01 per cent of Vinamilk shares.

Revenue rose 2 per cent to S$1.93 billion, driven by strong dairies sales and favourable translation effects, but negated by weaker soft drinks sales. Dairies revenue rose 4.6 per cent to $1.16 billion, boosted by an additional 6.5-month contribution from Vinamilk, versus the same period a year earlier, as profit recognition under the equity method started from April 2017.

Net finance costs rose 187.6 per cent from a year ago to S$15.9 million. Borrowings increased to finance purchases of Vinamilk shares.

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Full-year earnings per share was 8.4 Singapore cents, up from a restated 6.7 cents in the 2017 fiscal year, before fair value adjustment and exceptional items.

A final dividend of three Singapore cents will be paid on Feb 20 next year. This brings F&N's total full-year dividend to 4.5 Singapore cents, unchanged from a year ago.

Net asset value per share was S$1.95 as at Sept 30, unchanged from a year ago.

Koh Poh Tiong, chairman of the board executive committee, said that F&N's performance was "creditable" in a challenging environment.

The shares closed unchanged ar S$1.78 on Friday before results were announced after market close.