F&N reports 24.5% rise in full-year earnings to $153 mil on broad-based growth
SINGAPORE (Nov 18): Fraser and Neave has reported FY19 earnings ended Sept of $153.2 million, up 24.5% from FY18.
The conglomerate with interests in beer brewing, milk production and publishing says the stronger bottomline came on the back of broad-based strength across F&N’s business segments, especially from dairies.
FY19 revenue came in at $1.9 billion, up 4% over FY18, supported by strong performance from its Food & Beverage (F&B) division.
Profit before interest and taxation (PBIT) rose 32%, to $283.5 million from $215.3 million, boosted by higher soft drink and dairy sales, favourable input costs, contribution from newly-acquired businesses and higher profit share in associate Vinamilk.
But profit after taxation grew 18% to $212.4 million from $180.7 million. The lower after-tax growth was due to higher effective tax rate of 20.9% in FY19 versus 9.9% in FY18. This was the result of higher foreign tax rate following the expiration of corporate tax incentive in Thailand.
Higher soft drink and dairy sales contributed to F&B’s strong topline of $1.6 billion, representing a growth of 4% from $1.55 million in the previous year.
Dairies was again the star performer. The segment posted a 19% increase in PBIT, reaching $275.5 million in FY19. The strong performance from dairies this year was mainly supported by the group’s profit share of $110.9 million from Vinamilk and the 37% profit growth in Dairies Thailand.
Accelerating sales growth, lower sugar prices and marketing spend also saw a significant improvement in beverages PBIT to $6.7 million in FY19, from $0.4 million in the prior year.
Despite lower sales, publishing & printing posted earnings of $9.6 million in FY19, up from $0.1 million in FY18. The came on the back of higher margins, cost management, improving profitability from its core print business and maiden profit contribution from newly-acquired business.
In FY19 F&N made its maiden entry into the food service business with two acquisitions in Thailand – Starbucks Thailand with a fast-expanding footprint of 372 stores, and Genki Sushi, a franchised sushi restaurant business. Times Publishing also successfully acquired a majority stake in Print Lab in a strategic move to keep abreast of evolving market developments in the print segment.
““We remain confident in our long-term strategy, and we have the right team in place to ensure our continued ability to deliver long-term value for all our stakeholders,” says chairman Koh Poh Tiong in its outlook statement.
The directors of F&N have proposed a final dividend of 4.0 cents per share. Together with the interim dividend of 1.5 cents per share paid in June, total dividend for this year amounted to 5.5 cents, an increase of 1.0 cent over the prior year.
Shares in F&N closed 1 cent higher at $1.70.
