F&N reports earnings of $55.0 mil for the 1HFY2023, 19.8% lower y-o-y

An interim dividend of 1.5 cents has been declared for the 1HFY2023, unchanged from the same period the year before.

Fraser and Neave (F&N) F99 has reported earnings of $55.0 million for the 1HFY2023 ended March 31, 19.8% than the earnings of $68.5 million in the corresponding period the year before.

Earnings per share (EPS) for the period stood at 3.8 cents on a fully diluted basis before exceptional items and at 4.8 cents after exceptional items.

1HFY2023 revenue grew by 3.5% y-o-y to $1.05 billion with food & beverage (F&B) and publishing & printing (P&P) segments contributing to the growth. Excluding foreign exchange (forex), F&N’s revenue grew by 9% y-o-y driven by growth across all of its business segments. F&B’s topline grew “marginally” due to the unfavourable forex translation. In constant currency terms, F&B’s topline was up by 6% y-o-y due to higher selling prices, higher beer and soft drinks volumes on the successful execution of festive campaigns and new product launches. Improved canned milk sales in Malaysia and Thailand also improved during the six-month period.

P&P’s revenue also rose by 5% y-o-y due to its strong book distribution and retail sales despite the weaker performance from education.

Gross profit rose by 3.8% y-o-y to $296.6 million.

Other income (net) fell by 59.5% y-o-y to $2.5 million.

Share of results of joint venture (JV) companies rose by 81.6% y-o-y to $4.0 million while share of results of associated companies fell by 20.9% y-o-y to $39.9 million.

Profit before interest and tax (PBIT) fell by 16.7% y-o-y to $105.8 million. This is due to margin pressures from the higher input costs as well as unfavourable forex effects from foreign operations. In constant currency terms, PBIT fell by 11% y-o-y. Beverage earnings fell by 32% y-o-y despite the topline growth due to the higher input cost, increased brand spending and unfavourable forex. Dairies earnings, too, fell due to unfavourable forex translation, higher input costs and lower profit share from Vinamilk.

As at March 31, the group’s net asset value (NAV) per share stood at $2.01 while its cash and cash equivalents stood at $348.1 million.

For the 1HFY2023, an interim dividend of 1.5 cents has been declared, unchanged from the same period the year before. The dividend will be paid out on June 5.

The group’s 9% revenue growth on a constant currency basis was recognised by F&N CEO Hui Choon Kit, saying that the achievement “demonstrates the strength of our brands and distribution network, as well as the quality of our people”.

“However, we continue to face margin pressure due to cost inflation. In response, we are taking proactive measures to navigate this volatile and inflationary environment and take deliberate steps to further enhance our resiliency,” he says.

Shares in F&N closed 2 cents lower or 1.79% down at $1.10 on May 5.

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