Fraser & Neave's net profit plunged 78% to $35.2m in Q1 on back of extremely weak soft drinks sales

It missed expectations by long shot.

Fraser & Neave today reported that its net profit plunged 78% year-on-year to $35.2m in Q1, on back of weak soft drink sales in Malaysia.

Malaysia soft drink sales took a hit from flooding and the weak ringgit, while beer sales remained impressively solid.

According to CIMB, Fraser & Neave’s lacklustre results missed market expectations by a long shot, especially since Q1 is usually a seasonally stronger quarter.

“The miss looks solely attributed to Malaysia soft drinks, hit by a weak MYR and floods. Beer remains impressively solid. Unfortunately, this strongest division is likely to be sold off soon, as the arbitration has ruled against F&N, with only the price remains to be decided. The biggest swing factor in our SOTP valuations remains what the Myanmar army will pay for MBL. A low price provides downside to our SOTP valuations,” stated CIMB.