PETALING JAYA: Fraser & Neave Holdings Bhd
(F&N) will be focusing on driving sales for the coming festive seasons.
Despite continuing macro uncertainties, the group said it is seeing encouraging momentum of economic recovery in Malaysia and Thailand.
“While some commodity prices began to stabilise, prices of tin plate/cans, milk and palm oil are expected to stay elevated into 2023.
“Rising inflation and the weakening of the ringgit and baht in the face of the strong US dollar will further compound the cost pressure,” it said in a filing with Bursa Malaysia.
For its fourth quarter ended Sept 30, 2022, F&N’s net profit rose to RM98.89mil from RM58.69mil in the previous corresponding period.
This was mainly due to low effective income tax rate for the fourth quarter of financial year 2021, as a result of lower profits generated.
Revenue in the fourth quarter grew to RM1.14bil from RM896.26mil a year earlier.
F&N said this represented a 26.9% growth from the corresponding quarter last year, as the group’s businesses underwent movement and travel restrictions in Malaysia and Thailand.
“The improvement was driven by the positive momentum from the recovery of economic activities, out-of-home consumption and trade restocking, reflecting business returning to pre-pandemic level.”
Basic earnings per share stood at 27 sen, compared with 16 sen a year earlier.
For its financial year ended Sept 30, 2022, F&N’s net profit dipped to RM383.21mil from RM395.16mil in the previous corresponding period while revenue stood at RM4.47bil, compared with RM4.13bil a year earlier.
F&N said 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 baht.
It said the improved profits for the group were also due to the completion of several capital expenditure projects implemented, which is part of its effort to further strengthen its financial and operational footing by investing for the future through capacity building.
“This includes the integrated warehouse in Shah Alam and the RM52mil regional distribution centre in Rojana, Thailand. Equipped with the latest technologies, including the automated storage retrieval system, both began operations during the year.
“They are expected to deliver about RM10mil annual savings in logistics cost, as well as shorten delivery lead-time to customers and reduce carbon footprint for the group.”
During the year, F&N said it had also launched its new in-sourced transportation service in Malaysia with five new delivery trucks to better manage supply chain activities and have better control of the service quality and costs.
On its prospects, F&N said exports remain a key focus for the group, which also serves as a natural hedge to cushion the foreign exchange impact.
“The group will continue to act proactively to navigate the volatile environment and take deliberate steps to enhance our resiliency through the forward purchase of key commodities and hedging strategy.
“At the same time, we remain focused on accelerating innovation and driving operational efficiency, commercial excellence and fiscal discipline across our value chain,” it said.
