Fraser & Neave has reported earnings of $133.3 million for the FY2023 ended Sept 30, 3.0% higher y-o-y. The group’s earnings for the 2HFY2023 rose by 28.3% y-o-y to $78.0 million.
Revenue for the 2HFY2023 rose by 6.1% y-o-y to $1.05 billion while gross profit rose by 13.3% y-o-y to $326.4 million.
Revenue for the FY2023 rose by 4.8% y-o-y to $2.10 billion while gross profit rose by 8.6% y-o-y to $623.0 million. The higher revenue was supported largely by the group’s beverages businesses but offset by the unfavourable foreign exchange (forex) rates.
In constant currency terms, group revenue for the year rose by 10% y-o-y
Profit before interest and tax (pbit) rose by 6% y-o-y to $248.5 million although it would have been up by 12% y-o-y in constant currency terms.
Profit after tax for the full year rose by 16% y-o-y to $205.1 million. The amount includes a net exceptional gain of $6.9 million arising largely from the fair value gain from the remeasurement of the group’s investment in Cocoaland Holding.
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Segmentally, F&N’s food and beverage (F&B) and publishing & printing (P&P) businesses contributed to its overall topline growth while its dairies segment posted a strong increase in earnings, becoming the group’s largest contributor to its full-year bottomline.
Beverages pbit, however, fell by 2% y-o-y despite the robust top-line growth due to the adverse foreign currency translation and increased beer and soft drinks brand investment spending. The group’s P&P segment managed to narrow its losses marginally due to one-off items, specifically the prudent write-off of provisions for certain royalty income, totalling $4.9 million. Excluding these one-off items, P&P would have nearly halved this year's losses.
According to the group, it expects to see a substantial reduction of losses for the P&P business from its restructuring exercises conducted in 2023 for the three loss-making business entities.
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As at Sept 30, cash and cash equivalents stood at $431.8 million.
To mark the group’s 140th anniversary, its directors have proposed a final dividend of 4.0 cents per share, bringing the full-year dividend to 5.5 cents, up from last year’s 5.0 cents.
“2023 has been a year marked by challenges, requiring the group to demonstrate the resilience of its business and strength of its brands. In the face of a dynamic market landscape and persistent inflationary pressures, F&N continued to adapt and thrive. We take pride in reporting that we've continued to capture market share again, drive volume, sales and profit growth, and we enter FY2024 with strong momentum,” says Hui Choon Kit, CEO of F&N.
“The past couple of challenging years have revealed the underlying strength of our business, characterized by a robust, diversified model that has withstood supply chain disruptions, inflation, and the evolving challenges of a pandemic-ridden world. While we remain proactive in navigating this complex and inflationary environment, we are doubling down on strategies that have consistently delivered results,” he adds.
“Building on the robust momentum of the fourth quarter, our focus remains on driving productivity improvements to fund growth investments, tackle input cost challenges, and maintain balanced growth across the top and bottom lines. We firmly believe that the strength of our diversified business model, coupled with our commitment to innovation, will continue to be our guiding principles for success in the fiercely competitive market. As we look ahead, the team at F&N is well-prepared to meet the evolving challenges and opportunities that lie on our path to continued growth,” he continues.
Shares in F&N closed flat at $1.04 on Nov 9.
