Fraser & Neave profits jumped 81% to $73.82m in H1 2019

It was boosted by its Thai dairies business and Singapore soft drinks unit.

Fraser & Neave’s (F&N) profits jumped 81% YoY to $73.82m in H1 2019 from $40.77m in the same period last year, its financial statement revealed. Revenue rose 1.9% YoY from $914.613m in H1 2018 to $931.77m in H1 2019.

The boost in revenue was mainly due to the increases in its dairies business in Thailand and its soft drinks business in Singapore which benefitted from successful festive activations and marketing and branding initiatives. The increase was partly offset by challenges faced by the printing and publishing business.

Meanwhile, for Q2, F&N’s profits leapt 138.5% to $35.87m from $15.04m last year. Revenue rose 3.4% to $467.35m from $452.08m.

Notably, attributable profit before exceptional items (APBE) more than doubled to $35.9m mainly due to higher contributions from dairies operations, particularly from the group’s associated company in Vietnam, Vinamilk.

F&N’s beverages revenue rose 6.1% due to growth in its soft drinks business in Singapore on the back of improved sales of 100Plus and Seasons Iced Lemon Tea. Profit before interest and taxation (PBIT) losses persisted due to pre-operating costs incurred for the greenfield brewery in Myanmar and higher promotion expenses and unfavourable input costs incurred by Soft Drinks Malaysia.

The dairies business in Thailand recorded double-digit growth and boosted revenue growth of 5% to $287.6m. “The increase recorded by Dairies Thailand was offset by the decrease in revenue by Dairies Singapore, mainly due to a one-off export contract last year, and Dairies Malaysia as a result of canned milk competition and higher trade promotions,” said F&N.

Meanwhile, F&N’s printing business continued to suffer and fell 8% due to the continued decline in print volume experienced by the printing plants in Singapore and Malaysia and the timing difference in textbook publication.

F&N’s board declared an interim dividend of 1.5 cents to be paid on 10 June 2019.