SINGAPORE (Nov 11): DBS Vickers is keeping its “hold” call on Fraser & Neave with lower target price of $2.26 given that the latter’s headline earnings were held by disposal gains of $542 million from the sale of its 55% stake in Myanmar Brewery Limited. The group ended the year with net cash of $865 million.

Total revenue achieved was $2.1 billion, similar to FY14. The group’s PBIT declined 11% to $132 million from $148 million in FY14, due to higher expenditure on brand investment, lower soft drinks sales and higher distribution costs.

Revenue and contribution from Dairies improved from higher canned milk volumes and better PBIT margins of 6.1%, from 5.2% a year earlier. Soft drinks, however, faced challenges with PBIT dropping by 43% y-o-y to $38 million, due to a surge in brand investment costs in new markets, and weaker contribution from Malaysia and Singapore due to competition, unfavourable sales mix and higher costs.

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