F&N Q4 Earnings Down 9%, Impacted By Soft Drink Segment

• Fraser & Neave Holdings (F&N) posted an 8.8 percent decline in 4Q15 net profit to RM56.7 million, despite a 4.5 percent rise in turnover to RM1,007.8 million.

• The weaker performance was attributed to lower contributions from the soft drink segment, which saw a fall in revenue due to higher trade discounting effected due to intense price competition, coupled with higher advertising and promotions expenditure that impacted the segment’s operating profit.

• For FY15, the group’s top and bottom lines recorded gains of 6.3 percent and 8 percent to RM4,060.2 million and RM280.1 million respectively, contributed by improved dairies operations, especially in Thailand.

Significance: F&N has recommended a final dividend of RM0.355 per share (4Q14: RM0.33), which will bring full-year dividend to RM0.575 (FY14: RM0.55). Going forward, the firm expects to see challenging trading conditions in both Malaysia and Thailand against a softer consumer sentiment and volatile currency exchange rates but remains focused on expanding its brands’ reach.

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