Food Empire Holdings rises from loss with $4.9m core earnings in Q2

The company lost US$0.5m last year.

Food Empire's $4.9m (US$3.6m) core earnings in Q2 turned positive from last year's US$0.5m loss, largely thanks to the strengthening of RUB and UAH against the USD.

According to RHB, the company's Russian operations saw a 12% YoY improvement in sales on the back of a stronger RUB against the USD.

However, it fell 11% QoQ after the RUB depreciated again in the second half of June.

RHB analyst Juliana Cai said, "UAH should continue to improve as the currency continues to appreciate."

Kazakhstan and other Commonwealth of Independent States (CIS) reported less quarterly sales after a one-off reduction in price compensation to distributors last quarter.

"However, we would like to highlight that US’ new sanctions against Russia have resulted in c.5% QoQ drop in RUB in 3Q17," Cai said. "KZT has also depreciated by c.6% against the USD. We think the effect of weaknesses in RUB and KZT could be partially offset by the appreciation in UAD against the USD."

For Food Empire's Indochina markets, sales remained 7% lower YoY for the half-year. The company said this was affected by stiffer competition and difference of the Lunar New Year's timing in Q1.

Q2 sales grew 62% YoY to $18.6m (US$13.7m), thanks to larger contributions from its non-dairy creamer plant in Malaysia and instant coffee plant in India.