F&N is, however, confident the reopened borders in Malaysia and Thailand will spur tourist arrivals, consumer spending and economic activity.
KUALA LUMPUR: Fraser & Neave Holdings Bhd
(F&N) is anticipating headwinds to continue into the fourth quarter of its financial year ending Sept 30, 2022 (4Q22), as ongoing disruptions in supply chain, raw material shortages, historically high input prices and geopolitical uncertainties continue to pressure its margin.
In a filing with Bursa Malaysia yesterday, the fast moving consumer goods group noted that rising inflation and the weaker ringgit and baht will add further cost pressures, although the impact will be mitigated partially by export receipts in US dollars.
F&N is, however, confident the reopened borders in Malaysia and Thailand will spur tourist arrivals, consumer spending and economic activity.
“Moving forward, we will intensify efforts on upholding our leadership position in the market and execute the upcoming initiatives that will enable us to boldly take strategic steps toward new product offerings, integrated farming and potential partnership development,” said the group.
The group noted its warehouse at the Kota Kinabalu Industrial Park (KKIP) was completed in 3Q22 ended June 30 and its solar photovoltaic systems energised at two plants in Malaysia (Shah Alam and Pulau Indah).
“We are looking forward to the completion of our automatic storage and retrieval system (ASRS) warehouse in Shah Alam (pending full repairs and replacement of parts affected by the flood), drinking water production plant at KKIP, new liquid milk and plant-based beverages factory in Thailand, and plant-based beverages capability at our Pulau Indah plant by end-2022,” it added.
Cocoaland products
F&N also noted its proposed acquisition of Ladang Permai Damai Sdn Bhd and proposed privatisation of Cocoaland Holdings Bhd will drive its growth prospects.
For 3Q22, F&N’s net profit rose 1.4% year-on-year (y-o-y) to RM97.5mil while revenue increased 5.5% y-o-y to RM1.12bil. Earnings per share for the quarter was 26.6 sen (versus 26.2 sen a year earlier).
The group noted there was positive momentum from the recovery of economic activities and the strong festive sales in Malaysia as well as price adjustments, which moderated the lower revenue in Thailand and export markets in the period.
The 3Q22 pre-tax profit declined by 4% y-o-y to RM114.4mil due to commodity price pressures, the stronger US dollar and foreign-exchange translation loss from a weaker baht but was partially mitigated by improvement in margins from price adjustments.
For the nine months under review, net profit dropped 15.5% y-o-y to to RM284.32mil while revenue increased 3% y-o-y to RM3.33bil.
Earnings per share was 77.5 sen (versus 91.8 sen a year earlier).
F&N noted the weaker profits were mainly due to significantly higher commodity prices, flood impact and a foreign-exchange translation loss from a weaker baht.
“The rise in global commodity prices amounted to an additional RM300mil cost of goods sold impact for the nine months. Through rigorous cost-management measures, including price and trade discount adjustments, the group has significantly reduced the impact to its bottom line,” the F&N filing noted.
