Food Empire net profit drops by 12.8% in H1 2024

This was due to profit depreciation in the Russian market. 

Food Empire Holdings Limited net profit after tax dropped by 12.8% to US$23.2M ($30.7m) in H1 2024, due to lower profit contribution from the company’s Russian market. 

The Russia segment declined by 3.6% to US$68.1m($89.7m) in H1 2024, due to the depreciation of the Russian Ruble against the US dollar. 

The group’s selling and marketing expenses increased by 10.4% to US$17.4m ($23m) in H1 2024 from US$15.7m ($20.8m) in H1 2023, due to higher manpower costs, particularly in the group’s Vietnam market.

General and administrative expenses also increased by 13.4% to US$21.8m ($28.8m) in H1 2024 from US$19.2m ($25.4m) in H1 2023, due to higher manpower cost and inventory obsolescence provision.

Moreover, the company has gained revenue growth of 13.6% to US$225.2m ($298.2m) H1 2024, driven by its Southeast Asia (SEA), South Asia and Ukraine, Kazakhstan and CIS segments. 

Revenue from the SEA segment rose by 34.8% to US$61.8m ($81.4m) in H1 2024, mainly due to the higher contribution of the group’s Vietnam market. 

Vietnam emerged as Food Empire’s fastest-growing market in 2024 to date. This was attributed to the expansion of its sales force and rolling out of direct and indirect sales and marketing activities and promotions across both traditional and modern platforms.   

The South Asia segment rose by 36% to US$29.6m ($39m) in H1 2024, attributed to the increase in contribution from both the group’s freeze-dry and spray-dry coffee plants in India. 

Meanwhile, Ukraine, Kazakhstan and CIS segments improved by 15.7% to US$57.3m ($75.5m) in H1 2024, due to higher sales across the segments, particularly from the Group’s CIS market in view of higher sales volume and higher pricing.

The global instant coffee industry is expected to grow at a CAGR of 6.4% from 2023 to reach US$60.7b ($80.4b) by 2032, mainly driven by higher demand for convenience foods and a wider range of product options for consumers.

(US$1.00 = S$1.32)