F&N’s net profit surges 43% to $127.2m

But its scrapped brewery dragged profit after taxation by 29%.

F&N’s net profit swelled 43% to $127.2 million in the third quarter ended 30 June 2016--thanks to impressive turnout of its overseas dairies business. 

“The strong performance was attributed to robust performance in Dairies, where profit increased 64 per cent to $33.9 million in 3Q2016, despite higher operating costs incurred for expansion into new markets, brand building activities, and translation losses from unfavourable exchange rates,” F&N said in a media release.

After reflecting the sale of Myanmar Brewery in its FY2015 results, however, F&N’s net profit dipped 29% nine months to 30 June 2016.
“In August 2015, the Group completed the sale of its brewery in Myanmar. To reflect the sale of this brewery, its FY2015 operating results have been restated as Discontinued Operations,” F&N explained.

To make its beverage business more sour than it already is after the discontinued operations in Myanmar, the division’s 3Q2016 revenue dipped 9%. The decrease in revenue was largely due to a lacklustre soft drinks sales in Malaysia where increasing pricing pressures and weaker Ringgit eroded growth.

“Despite successful execution of festive consumer and trade promotions, intensifying pricing pressures, higher marketing spend on new products and in new markets, as well as weaker Ringgit adversely impacted earnings,” F&N explained.