Food Empire Holdings, fresh from reporting record earnings, has been steadily buying back shares on the open market this past month.
The most recent was on March 25 when the company acquired 100,000 shares at $1.345 each. This brings the total bought back under the current mandate to more than 9 million shares, equivalent to 1.69% of the company.
Before this transaction, the company was buying actively between March 6 and March 22, paying an average of between $1.36 and $1.40 each share for between 100,000 and 150,000 shares each day.
On Feb 27, Food Empire reported earnings of US$29.8 million ($40.05 million) for 2HFY2023 ended December 2023, down 9.6% from US$33 million in 2HFY2022, which was lifted by a one-off gain of US$15 million from the sale of a property. Excluding this item, Food Empire’s normalised earnings for 2HFY2023 would be up 65.7% over 2HFY2022.
The company was able to generate higher sales across most of its major markets. While sales in Russia, its single-largest market, dropped, overall sales increased by 6.9% to US$425.7 million, thanks to improvements seen in South Asia, Southeast Asia, Ukraine and other former Soviet states.
Food Empire plans to pay a record dividend of 10 cents for FY2023, consisting of a first and final dividend of 5 cents each, versus just 4.4 cents paid for FY2022. In its earnings commentary, Food Empire warns it is dealing with higher ingredient costs but believes demand for its products will remain strong across multiple markets.
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Buying back shares for cancellation
Yangzijiang Financial Holdin YF8 g has maintained a steady pace of buying back its own shares on the open market and has recently cancelled the shares it had bought back. The most recent was on March 26 when it acquired 599,200 shares at 32 cents each, and on March 25, when it bought 429,000 shares at 32 cents each. This brings the total number bought back under the current mandate to 159.4 million shares, equivalent to 4.338% of the total share base of 3.52 billion shares.
Earlier in the month, Yangzijiang Financial bought back around 24.7 million shares in total. The quantum bought back each time ranges from 549,900 shares on March 8 to more than 15 million shares on March 15. Throughout, the company paid around 32 cents each for these shares.
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Yangzijiang Financial’s share buyback has been going on for some time. On March 7, the company cancelled 276.6 million treasury shares worth $105.27 million bought back earlier, bringing the number down from 410.25 million to 133.6 million and the percentage of treasury shares against total shares down from 11.6% to 3.78%.
In its original reiteration as the finance and investment arm of Yangzijiang Shipbuilding, Yangzijiang Financial’s main business has been to give short-term loans to Chinese companies. With the separate listing, it is focusing more on investments managed out of China instead, using Singapore as the base.
For example, it set up a maritime fund to capture various financing and leasing opportunities in shipbuilding, which is enjoying a boom now. The fund size has been increased from the planned US$500 million to US$600 million. Meanwhile, the company’s proportion of non-performing loans for its China debt investment has stayed at above 40% in FY2023.
On Feb 28, the company reported FY2023 ended December earnings of $201.8 million, up 25% from $162 million in FY2022. Total income in the same period increased by 26% to $348.4 million. The company plans to pay a dividend of 2.2 cents, up from 1.8 cents paid in FY2022. At this level, the payout ratio was 40%, as guided. As at Dec 31, 2023, the company’s net asset value was $1.0662, up from $1.0495 as at Dec 31, 2022.
