F&N’s 2QFY22 net profit slips to RM94m

by BERNAMA / pic by MUHD AMIN NAHARUL

FRASER and Neave Holdings Bhd (F&N) registered a lower net profit of RM93.87 million in the second quarter ended March 31, 2022 (2QFY22), from RM103.51 million, amid commodity price pressures and unfavourable foreign-exchange translation.

Revenue, however, was higher at RM1.11 billion from RM1.09 billion as positive momentum from the recovery of economic activities in Malaysia moderated the dampened demand in Thailand affected by the Covid-19 Omicron variant outbreak.

In a filing to Bursa Malaysia yesterday, F&N said Malaysia’s food and beverage (F&B) revenue in 2QFY22 increased 9% to RM615.1 million from last year, on the back of higher sales from the Chinese New Year (CNY) festivities, easing Covid-19 restrictions and effective on-ground activation and promotions.

Beverage sales surged double-digit in 2QFY22 supported by greater out-of-home consumption and improvement in sales to the hotel, restaurant and cafe (Horeca) channel.

It said revenue for food products also notched double-digit growth from early sell-in for the Aidilfitri festive season and successful CNY promotions for its oyster sauce category.

Meanwhile, sales for dairy products posted improved revenue despite a volume decline following price adjustments undertaken in October 2021 to ease a sharp rise in input cost.

The price increase also impacted export volume in some price-sensitive markets.

“Exports from Malaysia also faced challenges from shipping disruption due to port congestion and limited shipping vessels to certain regions, and lower volume from Greater China amid strict Covid-19 lockdown measures.

“Following the floods in December 2021, our manufacturing facilities in Shah Alam resumed operations in stages since mid-January.

“There are out-of-stock situations for some products and are being managed,” it noted.

Meanwhile, F&B Thailand revenue in baht terms declined marginally by 1%, while revenue in ringgit terms was more adversely impacted by -6.5%.

F&N said F&B Thailand sustained growth in the domestic sales of sweetened condensed and evaporated milk through effective promotions and loyalty programmes, although sales for the liquid milk category was weak due to lower tourists and lower traffic at Horeca and modern trade outlets.

“Higher export revenue from price adjustments, as well as new orders and expansion into new markets, helped mitigate weaker domestic demand.

“Sales to Indochina were affected by slower traffic in modern trade, and the Horeca channel due to the pandemic and higher sales phasing to the 1QFY22.”