F&N’s Q2 income soars 26% to $26m

Thanks to F&B segment’s robust performance.

Fraser and Neave’s (F&N) net profits in 2QFY16 bubbled up to $26m, reflecting a 26% YoY surge.

According to the company’s media release, the quarter’s strong performance was buoyed by food and beverage (F&B) segments’ profits before interest and tax, which jumped 29% to $37.2m. The growth was also thanks to margin expansion due to favourable product mix, reduced input costs, and enhanced manufacturing and operational efficiencies despite negative foreign exchange translation effects.

In Q1, F&N’s soft drinks and dairies businesses in all its core markets of Singapore, Malaysia and Thailand saw gains in revenue and volume. This is thanks to well-executed consumer and trade promotions focused around the Lunar New Year demand. In addition, favourable product mix and strengthening distribution channels helped boost growth.

However, forex losses from the flagging MYR and THB weighed F&B revenue by 3% YoY to $405m. On top of a tumble in publishing and printing revenue, F&N’s revenue slipped 5% YoY to $474.3m.

Koh Poh Tiong, Chairman of the F&N Board Executive Committee, asserts that F&N will remain cautious amid a soft global economy and subdued consumer sentiments. F&N will also continually review its marketing spend and investment plans, given the current economic landscape.

“Despite this, the Group continues to have its sights fixed firmly on regional expansion, particularly Indonesia, Myanmar and Vietnam,” Koh notes.

“We are confident that we will strike the right balance between seeding and growing new markets for long-term sustainable growth and delivering financial performance this year," he adds.

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