The FMCG company is determined it will perform no worse than 2020, as it traditionally depends on the sales from festive seasons
by S BIRRUNTHA / pic by TMR FILE
FRASER & Neave Holdings Bhd (F&N) is expecting to post stronger financial performance in 2021, after recording a year of resilience in its financial year ended Sept 30, 2020 (FY20).
Its CEO Lim Yew Hoe (picture) said the fast-moving consumer goods (FMCG) company is determined it will perform no worse than 2020, as it traditionally depends on the sales from festive seasons such as the Chinese New Year and Hari Raya.
Sales for this year’s festive seasons were affected by the Covid-19 pandemic and the Movement Control Order with people cutting down on their spending, Lim added.
“Regardless of what will happen in the next 12 months or so, we will end up being one of the companies that come out better from whatever circumstances.
“For FY21, we will continue to improve on our products, market strategies, export capabilities and how we handle our customers, partners and the community,” he said in a virtual briefing on its FY20 results performance yesterday.
Lim added that the group is currently in a “cautious” mode amid the Covid-19 pandemic and local uncertainties as local and global situations remain fluid and uncertain for the next financial year.
He said the pandemic has delayed some of the company’s longer-term strategic initiatives, but it has also given more time for F&N to reassess the initiatives due to the new normal.
For the new normal, F&N has adopted strategies to boost customer experience and engagement through its F&N Life mobile platform, which was launched in January this year.
The group is working closely with e-commerce partners such as Lazada and Shopee, as well as collaborating with international platforms such as JD.com Inc in China to boost its e-commerce sales.
Lim noted that current contribution from online sales amounted to only RM5 million, which is relatively small.
“Our strategy now is to get more customers to download and try our F&N Life platform,” he noted.
To date, food and beverage (F&B) Malaysia makes up only 27.6% of F&N’s operating profit, while the rest is from F&B Thailand.
Lim said the shrinking profits from Malaysia were due to compressed margins owing to higher cost and stiff competition from other beverage businesses.
He added that F&N has started to diversify its revenue source from abroad with F&N’s main priority for the coming year is to make Dubai an effective location so that the group can expand into the Middle East and African markets.
“If we become big in Africa, then we might also consider opening an office there,” Lim noted.
F&N will embark on its 10MWP solar roof project at its plants in Shah Alam and Pulau Indah, Selangor, and Bentong, Pahang.
The project is part of its RM30 million investment into energy conservation over the next two years with money going into renewable energy programmes and projects that contribute to energy efficiency and carbon emission reduction.
The group aims to replace at least 20% of its total energy requirement in Malaysia with clean energy by 2022.
For its fourth quarter ended Sept 30, 2020, F&N’s net profit rose 26% to RM85.99 million from RM68.99 million last year on the back of robust exports and stabilising domestic sales.
The company saw a small contraction of 2% to RM953.7 million on its quarterly revenue, from RM975.09 million last year.
For the cumulative period, F&N’s net profit was flat at RM410.38 million from RM410.26 million the year earlier, while revenue dropped 2% to RM3.99 billion versus RM4.08 billion a year ago.
At market close yesterday, F&N’s shares closed six sen or 0.19% higher at RM31.08, valuing the company at RM11.4 billion.