PETALING JAYA: Fraser and Neave Holdings Bhd’s (F&N) net profit was up 2.4% to RM96.16mil in the third quarter ended June 30, 2021 (Q3) from RM93.86mil a year ago driven by higher revenue from both its food and beverage (F&B) companies in Malaysia and Thailand.
In a filing with Bursa Malaysia, the group said its revenue rose 15.4% to RM1.06bil in the quarter compared to RM918.07mil in the corresponding period a year ago due to the low base effect from last year, higher contribution from its F&B companies in Malaysia and Thailand, as well as a maiden contribution from its food business under the brand Sri Nona.
Its F&B Malaysia segment’s revenue for the quarter rose 17.1% to RM540.2mil from RM461.4mil a year ago, driven by the ramp up in sales in the run-up to Hari Raya Puasa (HRP), the harvest festive season and Ramadan Bazaars in operation.
Moreover, the revenue was also bolstered by the export business recording a high double-digit revenue growth in the quarter.
“The food business under the Sri Nona brand also contributed to the growth for the HRP season from the sale of rice cakes (ketupat) and other products with an increase of in-home consumption,” F&N said.
FN building
Meanwhile, its F&B Thailand division’s revenue also jumped 13.6% for Q3 to RM517.9mil compared to RM455.8mil a year ago, partly offset by an unfavourable Thai baht and Malaysian ringgit forex translation.
“The domestic market recorded a double-digit revenue growth from continued efforts to drive off-take in-store for modern trade and in traditional trade via premiums, promotions and loyalty programmes.
“Exports to Cambodia and Laos also grew by double digit through promotional campaigns to drive offtake in the trade and in provinces, despite lockdowns in both countries,” added F&N.
Although the group’s performance has been resilient, F&N remained cautious in its outlook due to the challenging market conditions.
“With the escalation in Covid-19 cases in our key markets in Thailand and Malaysia, we expect consumer sentiment to remain weak amidst growing unemployment and lesser disposable income.
“Sales to the out-of-home channels will likely be further impacted. Furthermore, any further uptrend for key commodities cost will put pressure on our efforts to manage profit margins,” it said.
F&N said it would continue to strengthen its fundamentals, including re-engineering and simplifying processes, optimising resources, reviewing its cost structure and undertaking restructuring exercise where appropriate. In addition, the group is leveraging on technology and digitalisation to improve processes and operations, to provide insight to sharpen our market execution and gain competitive advantage.
“We will continue to refine our product discounts and pricing to strengthen our businesses. At the same time, we will focus on purposeful innovations in the health and wellness category,” noted F&N.
On the new halal food front, the group said it would provide a platform to expand into more halal food segments and innovative products offerings. “We are leveraging on partnerships within our group to expand route- to-market coverage and supply chain synergies and in the near term, to expand capacity for the operations,” it added.
Moving forward, F&N is confident that its mid and long-term strategies would build a stronger and sustainable business and strengthen its resilience in the new normal amid the Covid-19 pandemic.
Its earnings per share increased to 26.20 sen in Q3 from 25.60 sen in the previous corresponding quarter.