QAF more than doubles Q3 earnings

Singapore

QAF more than doubled its net profit for the three months ended Sept 30 from a year ago, as a result of increased profitability across all its business segments, particularly in its Australian pork business, Rivalea.

The Singapore-listed company's net profit surged from S$3.8 million a year ago to S$8.1 million to end September 2014, though its revenue inched up from S$250.7 million to S$256.0 million.

The company said Rivalea's sales revenue fell slightly due to reduced sales of lower-margin products, but its net profit improved significantly due to higher overall prices, a better product mix and from productivity gains; raw materials and feed had also both cost less. Rivalea is the largest producer of pork in Australia and Australasia, and is one of Australia's largest exporters of pork products.

QAF's bakery business, well-known for its Gardenia and Bonjour brands, also achieved increased profitability in all its four markets - Singapore, Malaysia, the Philippines and Australia - through the launch of new products, increased market share, better efficiencies and higher overall selling prices.

Its trading and logistics division, which includes its wholesale food trading and distribution activities - at more than 50 years old, this is QAF's oldest core business - also achieved higher profit from its food service, export operations and increased rental income from its cold-storage operations.

There was a 13 per cent jump in QAF's operating expenses to S$23.1 million in the third quarter, due mainly to an unrealised foreign-exchange loss of S$1.9 million, against S$0.3 million in Q3 2013.

Its Australian dollar-denominated assets were affected by the depreciation of the Australian dollar against the Singapore dollar during the quarter.

The group also ran up higher distribution and transportation expenses as a result of the higher global cost of fuel.

The company said: "As a result of the momentum achieved to date by all of the group's major business segments and the successful implementation of business strategies, the group is highly confident that it will achieve higher profits in the financial year ending Dec 31, 2014, compared to the financial year ended Dec 31, 2013."

Earnings per share stood at 1.5 Singapore cents and net asset value per share, 72.9 Singapore cents as at Sept 30, 2014. On Thursday, QAF's share price closed at S$1.01, up a cent.