SINGAPORE (Apr 26): Yeo Hiap Seng reported 1Q earnings surged more than sevenfold to $10.2 million from $1.4 million a year ago on one-off gains.
This follows the disposal of a US property after the F&B manufacturer conducted a rationalisation exercise of its property portfolio by to reduce its operating costs base.
Accordingly, this contributed to higher gain on disposal of property, plant and equipment in other gains of $13.7 million compared to a loss of $2.4 million a year ago, alongside higher fair value gains on financial assets.
Revenue increased 0.9% to $92.60 million while gross profit rose 1.1% to $92.6 million mainly due to higher sales in Singapore, Cambodia and Europe during the current financial quarter.
To promote its brands and protect its market share, Yeo Hiap Seng has increased its advertising and promotion expenses during the festive season.
During the financial quarter, administrative expenses also increased from the scale-up of back-end operations in Cambodia in preparation of start of local production in later part of this year.
Over the next 12 months, Yeo Hiap Seng expects F&B margins to remain under pressure from weak consumption outlook in its key markets, competitive selling prices and fluctuations in raw material prices.
In addition, significant fluctuations in regional currencies are expected, particularly with regards to the Malaysian Ringgit, the Indonesian Rupiah and the Chinese Yuan.
The group will also reformulate its beverage products to promote healthier consumption given regulators have focused their efforts on promoting lower sugar consumption.
In Malaysia, the group has taken appropriate actions to mitigate the implementation of excise tax of 40 sen per litre on sweetened beverages though this has been postponed to July.
Shares in Yeo Hiap Seng closed 1 cent higher at 98 cents on Friday.
