Fraser & Neave Q3 profits dropped 12.4% to $50.3m

Profits of its beverages and publishing businesses fell.

The third quarter was a spoil for Fraser & Neave as its profits fell by 12.4% to $50.3m from $57.43m in the same period last year. Revenue inched up by 0.4% to $484.97m from $483.08m last year.

According to its financial statement, beverages revenue dipped by 5.4% to $138.3m no thanks to the impact of GST changes in Malaysia and the depreciation of the Indonesian Rupiah. The decline was offset by higher sales in Singapore after Hari Raya Puasa festivities. Profits jumped 38.1%, thanks to favourable costs in its Malaysian soft drinks business.

Dairies revenue grew by 5.2% to $290.4m thanks to higher export sales in Malaysia and Thailand. Thailand, however, was hit by a fire at a co-manufacturer’s plant. Singapore dairies revenue grew thanks to price initiatives and higher export sales to Indonesia.

Profit of its dairies business dipped by 7.7% to $73.6m due to lower contribution from Vietnam Dairy Products Joint Stock Company (Vinamilk) as last year’s contribution included both dividend income and share of profits when equity accounting was first applied.

“Contribution from our associated company, Vinamilk, is expected to increase as the group will equity account the results of Vinamilk for the full 12 months in this new financial year,” the company said.

Meanwhile, printing and publishing revenue fell by 7.2% to $60.7m due to the general decline in magazine print demand and timing of order deliveries whilst the decrease in retail’s revenue was due to the cessation of airport stores. Losses widened to $4.7m due to poor sales, but efforts to contain cost and improve operational efficiencies helped to partly reduce them.