SINGAPORE (May 11): Fraser and Neave (F&N) has reported earnings of $71.8 million for 1HFY2020 ended March, down 2.7% from earnings of $73.8 million last year. 

This brings earnings per share for the first half of the group’s financial year to 5.0 cents, marginally lower than 5.1 cents a year ago.  

Revenue for the period increased 4.8% to $976.7 million from $931.8 million for the corresponding period the previous year. This was primarily attributable to strong performance from the group’s Food & Beverage (F&B) division. 

Segmentally, revenue from the beverages segment increased 2.4% to $241.1 million due to the revenue contributions from Emerald Brewery in Myanmar upon the start of its commercial

This was, however, partially offset by a decrease in revenue from F&N Malaysia’s soft drinks segment which was impacted by flooding in East Malaysia as well as the Covid-19 outbreak. 

Meanwhile, the group’s dairies segment booked a 7.3% increase in revenue to $609.2 million due to increased contributions from Thailand on the back of successful marketing and branding campaigns, as well as higher revenue from Malaysia and Singapore. 

On the flipside, the group’s printing and publishing segment saw its losses widen to $11.0 million from $7.1 million last year due to a combination of printing plant closures across China and Malaysia, weaker retail traffic flow and deferments of textbook adoptions in key markets due to the pandemic. 

Despite the losses, F&N says the segment’s business has been strengthened over the past few years through various strategic initiatives, and is now resilient enough to ride out the negative impact from the pandemic. 

Cost of sales for the period increased 4.6% to $655.3 million, and gross profit increased 5.2% to $321.4 million. 

The group has also increased its stake in Vietnam Dairy Products Joint Stock Company, Vinamilk. Through purchases from the open market, F&N now owns a 20.4% stake in the company, up from 20.0% in end-December 2019. 

As at end-March, cash and cash equivalents stood at $249.2 million. 

F&N’s board of directors has also declared an interim dividend of 1.5 cents per share, unchanged from the interim dividend a year ago. The group says the dividend is slated to be paid out on June 18. 

Although F&N says its distribution logistics across the markets it operates in remain largely intact and unaffected by Covid-19 disruptions, the group is bracing for weaker consumer demand in its beverage and dairies operations in 2HFY2020 due to extended movement restrictions imposed in various markets, as well as the general decline of economic activities. 

“Management remains positive that our strong fundamentals, financials and banking facilities will help us weather the ongoing economic headwinds, although it is still too early to rule out adverse financial impact that Covid-19 may further bring as the crisis is still unfolding,” says F&N. 

“We are strengthening our businesses to be ready when economic activities eventually return and consumer demand recovers,” adds the group. 

Shares in F&N closed two cents lower, or 1.4% down, at $1.45 on Monday prior to the results announcement.