PETALING JAYA: Fraser & Neave Holdings Bhd
(F&N) will continue to manage cost pressures and supply chain disruptions arising from heightened global and regional geopolitical uncertainties, including conflict in West Asia, which have led to elevated input costs.
For the second quarter ended March 31, 2026 (2Q26), F&N net profit declined by 31% year-on-year (y-o-y) to RM96.3mil or earnings per share of 26.30 sen. This is in tandem with lower revenue recorded and higher operational costs for the integrated dairy farm as operations continue to scale up from pre-commercial stage.
Revenue for 2Q26 fell by 8% y-o-y to RM1.2bil. This was mainly due to weaker performance in F&B Indochina, where revenue fell 16.9% amid softer market conditions and prolonged border closures, while F&B Malaysia recorded a marginal 1% decline.
For the first half of 2026 (1H26), F&N posted a 33% drop in its net profit to RM208.5mil, mainly from higher operational costs for the integrated dairy farm as operations continued to scale up, and unfavourable foreign exchange impact.
The group’s revenue decreased by 7% y-o-y to RM2.5bil in 1H26. On its revenue performance, the group maintained that it was supported by food & beverages Malaysia (F&B Malaysia), which posted revenue growth of 2.3%, driven by improved sales momentum in East Malaysia and stronger export demand.
Moreover, higher local dairy sales under the School Milk Programme, together with wider distribution across the hotel, restaurant and catering (HORECA) segment, further contributed to sales earnings in 1H26.
Meanwhile, F&B Indochina recorded lower revenue in 1H26 primarily due to softer economic activity in Thailand, while sales to Cambodia remained subdued amid ongoing border tensions.
F&N chief executive officer Lim Yew Hoe said while external factors have impacted near-term performance, its core business fundamentals remain sound, and the group is managing these challenges proactively.
“Despite heightened cost pressures and more cautious consumer spending, our core dairy and beverages business in Malaysia has remained stable, reflecting sustained demand, supported by the strength of our market position.
“At the same time, cost discipline and our ongoing strategic investments continue to underpin the group’s long-term growth. We remain confident in delivering stronger performance over the medium to long term. Our investments today, including F&N AgriValley and our dairy facility in Cambodia, are strengthening supply chain resilience and cost efficiency as we navigate evolving market conditions,” he said in a statement yesterday.
The key cost drivers include packaging materials and key ingredients, alongside elevated energy costs such as liquefied petroleum gas, diesel and natural gas.
“Notwithstanding these near-term pressures, our healthy capital structure and consistent gearing ratio enable us to draw on internally generated funds to support ongoing capital expenditure and strategic initiatives. We remain focused on executing our key priorities while maintaining a prudent and measured approach. We will continue to balance cost pressures with market sensitivities, with any price adjustments, if necessary, implemented gradually and considered only as a last resort,” Lim said.
Reflecting the group’s stable cash flow generation despite earnings pressures, the board has maintained an interim single-tier dividend of 30 sen per share (2025: 30 sen) for the financial year ending Sept 30, 2026.
This dividend, amounting to approximately RM110mil will be paid on June 3, 2026.
