Fraser & Neave 3Q net profit at RM93.84m


  • Corporate News
  • Tuesday, 04 Aug 2020

Fraser Neave local fruit drinks

UALA LUMPUR: Fraser & Neave Holdings Bhd's (FNH) net profit fell by 18.3% to RM93.84mil in the third quarter ended June 30,2020 as revenue was impacted by the Covid-19 pandemic and movement control orders (MCO).

In a statement to Bursa Malaysia on Tuesday, it said its net profit was lower compared with RM114.94mil a year ago. Group profit before tax declined by 22.8% to RM120mil. Earnings per share were 25.60 sen compared with 31.30 sen.

FNH said group revenue eased by 13.9% to RM918.07mil from RM1.06bil from adverse impact of the Covid-19 pandemic and MCO measures on consumer demand.

On the Malaysian operations, FNH said amidst the pandemic outbreak and Malaysia’s MCO, F&B Malaysia current quarter revenue declined by 19.3% to RM461.4mil.

Operating profit for F&B Malaysia declined by 42.5% to RM30.3mil from lower volume, higher input costs and higher marketing expenditure for new product launches.

“Current quarter revenue for the domestic operations declined by 21.2% with flat monthly sales, unlike previous years where there are sales increase in the run up to the Hari Raya festive season. Beverages sales were particularly affected while dairies sales were less affected, ” it said.

FNH said with MCO and the restrictions imposed on dine-ins, sales to its hotel, restaurants and cafes (HORECA), convenience stores and general trade (GT) channels were affected significantly. However, these have been mitigated by increase in sales to modern trade channel.

“Since the Government eased the MCO restrictions from early May, F&B Malaysia has seen gradual improvement in sales and stocks movement. HORECA channel which has been more severely impacted is slowly improving as they are now allowed to operate under Recovery MCO.

“Sales to GT channel had started to stabilise since beginning of June 2020. Our Export sales have also started to see gradual return of sales to certain markets. The MCO did not result in major disruption to our manufacturing operations as we implemented measures to safeguard the health of our workers, ” it said.

As for F&B Thailand, the 3Q revenue fell by 7.7% (11.1% in Thai Baht terms) to RM455.8mil; mainly impacted by contraction in sales in domestic and Indochina markets and partially offset by growth in exports.

Thailand's operating profit fell by 7.6% (10.9% in Thai Baht terms) to RM91.6mil due to lower volume, higher input costs, weakening Thai Baht; and partially offset by lower advertising, marketing and operating expenses.

For the nine months, its net profit fell by 5.2% to RM324.39mil from RM342.23mil in the previous corresponding period. Its revenue dipped by 2.2% to RM3.03bil compared with RM3.10bil.

FNH said group revenue was impacted by the Covid-19 pandemic and cushioned by strong 1Q revenue growth for F&B Thailand and F&B Malaysia.

“Group profit before tax declined by 6.5%, with F&B Thailand contributing over 70% of the group operating profit, ” it said.

When compared with the second quarter ended March 31,2020, it said 3Q revenue fell by 8.7% to RM918.1 mil from 2Q: RM1bil mainly due to a full quarter impact of weak consumer sentiment and movement control measures for both F&B Malaysia (-7.6% vs 2Q) and F&B Thailand in 3Q (-9.6% vs 2Q).

The higher 2nd quarter revenue was also due to products front-loaded into the trade ahead of the emergency decree implemented in Thailand.

Group profit before tax fell by 10.5% to RM120mil (2Q: RM134.1mil) due to lower revenue, higher input and packaging costs and weakening RM/Thai Baht translation.

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