F&N posts RM1b revenue for 4Q, business returns to pre-pandemic levels

For the same quarter, the beverage company also posted an almost double net profit of RM98.9m

FRASER & Neave Holdings Bhd (F&N) posted revenue of RM1.14 billion for its fourth quarter ended Sept 30, 2022 (4Q22), driven by the positive momentum from the recovery of economic activities, out-of-home (OOH) consumption and trade restocking.

In an exchange filing yesterday, the company said the 30% quarterly revenue increase from last year reflected business returning to pre-pandemic levels.

For the same quarter, the company posted a net profit of RM98.89 million, almost doubling the RM58.69 million in 4Q21.

For the full year (FY22), it posted a net profit RM383.21 million on RM4.47 billion in turnover, compared to RM395.16 in net profit and RM4.13 billion in turnover in FY21.

The full year revenue, up 8% in FY22, was underpinned by strong domestic demand in Malaysia and Thailand, price adjustment strategy, and the first full-year contribution from the group’s food business, it said in a statement accompanying the results.

It said the improved revenue and cost management measures, including price and trade discount adjustments, had significantly mitigated the impact of higher commodity and freight costs, flood recovery expenses and foreign exchange translation loss from a weaker Thai Baht.

Food and beverage (F&B) Malaysia increased its revenue for the quarter by 31.1% to RM600.6 million on the back of double-digit volume growth in beverage and improved sales of dairy products from successful market activations and recovery of OOH consumption in the domestic market despite higher selling prices. 

Excluding one-off non-operating items, it said F&B Malaysia operating profit improved from RM19.4 million to RM48.3 million during the quarter under review, further contributed by savings realised from the partial utilisation of the integrated Automatic Storage and Retrieval System warehouse in Shah Alam.

In Thailand, it said new product innovations, effective loyalty programmes and expansion of distribution coverage led to double-digit growth in sales for both evaporated and sweetened condensed milk categories. F&B Thailand grew its revenue for the quarter by 22.8% (25.7% in Thai baht) to RM535.8 million, boosted by the progressive recovery in the tourism industry and OOH consumption.

During the year under review, F&N said it strengthened its halal packaged food pillar with the proposed acquisition of Cocoaland Holdings Bhd. The acquisition was completed on Nov 4, 2022, making it a wholly owned subsidiary of the group.

The investment will add a range of established Malaysian confectionery and snack brands to the group’s portfolio as well as serve as a platform to expand into more halal food segments and to meet the rising demand for packaged food products, the company said in the statement.

Meanwhile, with the completion of Ladang Permai Damai acquisition, it said the group is also on track to resume its plans on the upstream fresh milk business for downstream production and distribution of fresh milk.

“This will enable us to own a vertical integration business and operations based on locally grown crop for feed to F&N’s dairy farm, which in turn will lower the value chain cost per litre. The move will also help us be less dependent on imported milk and will help to promote the local agricultural industry,” said F&N CEO Lim Yew Hoe

The stock ended yesterday’s trade up four sen at RM19.94, giving it a market capitalisation of RM7.31 billion. — TMR