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Lack of exceptional gain pulls F&N Q3 net profit down to S$50.3m
HIGHER input costs and last year’s exceptional gain of S$1.2 billion that resulted from the group's enlarged control of Vietnam Dairy Products Joint Stock Co (Vinamilk), the largest dairy company in Vietnam, weighed down results for Fraser and Neave (F&N) in its third quarter.
Net profit for the beverage cum printing and publishing company sank 96 per cent to S$50.3 million from the preceding year, the group said on Tuesday. Excluding fair value reserves and exceptional items, the group’s net profit would have declined a milder 12 per cent, the group said.
Segment wise, beverage sales in Malaysia were impacted by soft market sentiments and consumers postponing purchases as a result of changes in GST regulations. Export sales to Indonesia faced headwinds due to the depreciating rupiah. These were offset by higher sales in Singapore as a result of the Hari Raya Puasa festivities.
Dairies, which remained the group’s key contributor, saw Malaysia's contribution boosted by export sales and favourable currency movements, while Thailand's revenue growth was fuelled by higher export sales, partly offset by production downtime as a result of a fire at a co-manufacturer's plant. Dairies Singapore revenue grew on the back of tactical price initiatives and higher export sales to Indonesia.
However, the dairy segment's third-quarter earnings fell by about S$10 million to S$58.8 million due to the absence of dividend income from Vinamilk. Last year’s contribution from Vinamilk had included both dividend income and share of profits when the equity accounting was first applied, while the current quarter’s contribution includes only the current period’s share of profits from Vinamilk, it said.
Publishing and printing recorded higher losses in this quarter, hit by a decline in magazine print demand and timing of order deliveries as well as the cessation of airport stores, partly mitigated by the completion of the acquisition of Penguin Random House and Penguin Books Malaysia.
For the three months ended June 30, revenue edged up 0.4 per cent to S$485 million from the year-ago period, thanks to strong dairies sales and favourable translation effects, negated by weaker soft drinks sales, it said.
Earnings per share shrank to 3.5 Singapore cents from 4 Singapore cents in the previous year. Net asset value per share crept up to S$1.96 from S$1.95 nine months ago.
F&N shares closed 2 Singapore cents or 1 per cent lower at S$1.96 on Tuesday.