KUALA LUMPUR, 4 May 2020 – For the second quarter ended March 31, 2020, Fraser & Neave Holdings Bhd maintained its Group operating profit and profit before tax at RM130 million and RM134 million respectively. The results were driven by strong contribution from F&B Thailand.
F&NHB revenue eased marginally from RM1,025.4 million to RM1,005.6 million from adverse impact of the COVID-19 pandemic and movement control measures on consumer demand.
This is reflected in Food & Beverages Malaysia’s (F&B Malaysia) revenue for the second quarter, which declined by 7.8 per cent to RM499.2 million due to an earlier sell-in for Chinese New Year this year; added impact from the Movement Control Order (MCO) which commenced from March 18, 2020 and partially offset by higher growth in export revenue especially in the ASEAN and Greater China region.
Despite recording growth in exports compared to last year, the quantum increase was limited due to postponement of orders as a result of lockdown and quarantine imposed on shipping vessels in certain countries due to COVID-19.
Lower revenue, higher dairies input cost, unfavourable foreign currency impact and partially offset by lower advertising and promotions spend led to lower operating profit for F&B Malaysia in the second quarter, which declined 13.7 per cent to RM24.3 million from RM28.2 million last year.
Meanwhile, Food & Beverages Thailand (F&B Thailand) grew its revenue by 4.3 per cent to RM504.2 million for the second quarter from RM483.6 million last year aided by favourable RM/THB forex translation.
Its revenue in Thai Baht terms grew marginally by 1.3 per cent while weathering the impact of the COVID-19 outbreak.
This was attributed to higher load of shipments delivered ahead for the export OEM business; products front-loaded into the trade ahead of the emergency decree implemented in Thailand from March 26, 2020; and slight growth in the Indochina market.
Operating profit for F&B Thailand rose by 2.5 per cent in the second quarter, from RM103.0 million last year to RM105.5 million mainly due to net favourable input costs aided by a stronger Thai Baht and offset by higher marketing and trade spending.
Meanwhile, F&NHB posted higher revenue for the first half ended 31 March 2020 which grew 4.0 per cent to RM2,116.7 million from RM2,035.7 million last year. Group operating profit rose by 2.2 per cent to RM288.3 million whilst Group profit before tax grew 2.3 per cent to RM294.7 million for the first half year compared to 2019.
Despite subdued consumer demand, F&B Malaysia maintained its sales volume as last year while its revenue eased marginally by 1.0 per cent to RM1,084.2 million for the first half year.
This result is bolstered by double digit growth in exports and contributions from new products such as Sunkist Pure Juice Drink and F&N Ice Mountain Sparkling Water.
Meanwhile, net unfavourable dairies input costs led to operating profit for F&B Malaysia declining 9.5 per cent to RM73.0 million for its first half year.
Revenue for F&B Thailand rose 9.6 per cent to RM1,030.0 million for the first half year from RM940.1 million last year due to a strong first quarter performance.
Higher revenue, net favourable input and packaging costs, offset by higher marketing spending for new product launches contributed to 7.0 per cent growth in F&B Thailand’s operating profit which rose to RM216.4 million
Commenting on prospect for rest of the year, F&NHB Chairman, Tengku Syed Badarudin Jamalullail said that the Group foresees weak consumer demand to continue into second half of the financial year, especially for its beverage sales as consumers adjust to a ‘new normal’ of reduced social activities.
In line with F&NHB’s performance, the Board declared an interim single tier dividend of 27.0 sen per share (2019: 27.0 sen) for the financial year ending 30 September 2020.
This dividend amounting to approximately RM99.0 million will be paid on 12 June 2020.
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