F&N attributable profit gulps down a 24% decline to $106.6m

But group improved its core margins.

In a release, Fraser and Neave, Limited (F&N) achieved revenue of $1 billion in the third quarter ended 30 June 2013 (3Q2013), an increase of 4 per cent over the same period last year.

Coupled with improved margins from Food & Beverage (F&B), 3Q2013 profit before interest and taxation (PBIT) improved 7 per cent to $165 million. F&B posted strong earnings growth as a result of improved consumer demand, strong trade and market execution as well as lower input costs. Properties earnings jumped 22 per cent this quarter, underpinned by strong fee and rental income and earnings from progressive recognition of pre-sold residential projects in Singapore.

For the nine months ended 30 June 2013 (9M2013), Group revenue grew 12 per cent to $2.83 billion. Underpinned by double-digit revenue growth in Properties and F&B, improved margins from favourable mix and lower input costs, 9M2013 PBIT jumped 25 per cent to $489 million. In November 2012, F&N completed the disposal of its entire interest in Asia Pacific Breweries Limited (APB) for $5.58 billion. Consequently the Group realised a disposal gain of $4.75 billion, pushing 9M2013 PAT to $5.07 billion.

Subsequent to the divestment of F&N’s entire interest in APB, the remaining beer business has been grouped with Soft Drinks to form the Beverages division. In the nine months ended 30 June 2013, Beverages PBIT rose 31 per cent to $109 million on higher soft drinks and beer volumes, as well as favourable sales and channel mix.

After a year of separation from The Coca Cola Company franchise, the Group’s Soft Drinks division in Malaysia continued to register volume growth despite intense competition. Similarly, the Group’s 55-per cent held Myanmar Brewery Limited (MBL) also delivered strong results, continuing the good momentum from FY2012. MBL registered volume growth and maintained strong market leadership position in Myanmar with its leading beer brands like Myanmar Beer, Myanmar Double Strong and Andaman Gold.

Dairies PBIT grew threefold to $45 million in 9M2013 mainly due to the recovery of its dairy business in Thailand from the effects of floods in 2011 and a 11-per cent jump in revenue 9M2013 earnings of $315 million from Properties, up 19 per cent from the last corresponding period, was driven by strong contribution from pre-sold development projects in Singapore and higher income from investment properties and serviced apartments.

On the back of a 24-per cent improvement in revenue, Development Property 9M2013 PBIT grew 22 per cent to $178 million, mainly from projects currently under development in Singapore namely Boathouse Residences, Eight Courtyards, Flamingo Valley, Palm Isles, Seastrand, Waterfront Gold, Waterfront Isle and Watertown, as well as One Central Park West, phase 1 of One Central Park, in Australia. One Central Park West was completed in 3Q2013 and approximately 180 settlements have taken place so far.

Commercial Property, which comprises Investment Property, REITs and Hospitality, also recorded double-digit earnings growth, despite the absence of rental income from two investment properties following the divestment of a listed subsidiary, Frasers Property China Limited in September 2012. REITs and Hospitality each delivered strong performance with profit up by 21 per cent and 74 per cent, respectively.