Coffee manufacturer and distributor Food Empire announced in its business update that it has achieved a revenue of US$286.0 million in 9MFY2022, a y-o-y increase of 26.5% as compared to US$226.1 million in 9MFY2021.
The increase was across all segments particularly from the group’s South Asia segment. On a quarterly basis, the group’s revenue for 3QFY2022 increased by 42.1% to US$108.6 million mainly from the group’s Russia and South Asia segments.
The group’s net profit after tax for 9MFY2022 increased by US$35.1 million or 240.9% y-o-y to US$49.6 million. For 3QFY2022, the group’s net profit after tax increased from US$3.1 million in 3QFY2021 to US$22.6 million. This was mainly attributable to higher average selling prices across most of the group’s business segments coupled with one-off gain of US$15.0 million from the disposal of non-core asset.
The group generated net operating cash flows of US$39.6 million in 9MFY2022 as compared to US$10.2 million in 9MFY2021. Together with the sale proceeds from the non-core asset, cash and cash equivalents stood at US$107.1 million as at Sept 30.
In the group’s Russian, Kazakhstan and Commonwealth of Independent States (CIS) segments, the group is monitoring market and political developments closely and continues to maintain an adequate level of inventory to ensure minimum disruptions in operations.
In the group’s Ukraine market, supply chain challenges continue due to the on-going conflict and it is monitoring the situation closely.
In the South-East Asia segment, the group will increase its advertising and promotion activities and expects consumer demand to remain strong.
In Malaysia, where the group operates non-dairy creamer (NDC), snacks and instant coffee-mix production facilities, demand has remained resilient despite inflationary pressures. It has been able to optimise production and show profit growth. In particular, the snack segment had significant sales increase from Southeast Asia. The group aims to achieve higher economies of scale for its Malaysia operations after the completion of the NDC factory expansion by 2024.
In India, both the group’s spray dry and freeze dry coffee plants continue to witness strong international demand. Both the plants are operating at near maximum capacity as the group strives to optimise capacity utilisation.
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Overall, the group believes that it has demonstrated resilience despite the challenging operating environment and will strive to deliver growth. Backed by strong fundamentals and a healthy financial position, the board is optimistic of the group’s long-term prospects.
Shares in Food Empire last traded at 50 cents on Nov 10.
Photo: The Edge Singapore/ Albert Chua
