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F&N posts 9.5% drop in FY2022 earnings to $176.9 mil

Samantha Chiew
Samantha Chiew11/10/2022 09:58 PM GMT+08  • 3 min read
F&N posts 9.5% drop in FY2022 earnings to $176.9 mil
F&N sees lower FY2022 earnings despite higher revenue.
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F&B manufacturer Fraser and Neave (F&N) announced that its FY2022 ended September earnings came in at $176.9 million, some 9.5% lower compared to the previous year’s $195.5 million.

This brings earnings per share to 8.9 cents, down from 10.0 cents in the previous year.

This came on the back of revenue increasing by 6.6% y-o-y to $2.0 billion from $1.9 billion a year ago. This was boosted by the group’s strong 2HFY2022 performance, which saw revenue grow 11.5% y-o-y to $993.2 million.

During 4QFY2022, the group saw robust demand, combined with stronger selling prices supported revenue growth. As the Ukraine war and supply chain bottlenecks continued to weigh on input costs, in addition to adverse foreign currency translation impact, group profit before interest and taxation (PBIT) fell 11%, or a 9% drop on a constant currency basis, to $233.4 million, down from $261.7 million in FY2021.

The Group took an $7.4 million exceptional charge largely on the impairment of inventories and property, plant and equipment in connection with the flash floods in Malaysia earlier in the year.

Despite disruptions from the Covid-19 pandemic in 1H2022, the group’s F&B grew topline by 8%, to $1.8 billion from $1.6 billion in the prior year. Robust demand and price increases supported F&B growth.

See also: Sabana Industrial REIT reports 7.0% y-o-y drop in 2HFY2022 DPU of 1.46 cents

In particular, beverages (comprises beer and soft drinks) saw top line grow 26% to $568.9 million in FY2022, from $452.7 million in FY2021, lifted by strong 2HFY2022 performance. Its strong growth was buoyed by higher selling prices, as well as higher beer and soft drinks volumes coming from successful execution of promotion campaigns and new product launches.

Dairies sales rebounded in 2HFY2022 on easing of lockdown measures, price adjustments, effective promotions and loyalty programs, cushioning the adverse impact of unfavourable foreign currency translation and a weaker 1HFY2022.

In Thailand, despite lower export volume, strong domestic and Indochina canned milk demand and increased selling prices drove revenue growth in FY2022.

See also: CDLHT reports 2HFY2022 DPS of 3.59 cents, up by 17.3% y-o-y

In Dairies Malaysia, higher revenue was supported by price increases. Consequently, Dairies FY2022 revenue remained flat y-o-y at $1.2 billion.

Revenue recovery for publishing and printing (P&P) in FY2022 remained uneven. While its 1H2022 performance was adversely impacted by Covid-19 pandemic movement restriction measures, 2HFY2022 saw strong performance from education with its non-print digital and education services segment performing strongly, and distribution recording strong book sales. Despite a better 2HFY2022 performance, P&P revenue fell 3%, to $214.6 million.

For the FY2022 period, the group declared a final dividend of 3.5 cents per share, representing 50% of earnings. Together with the interim dividend of 1.5 cents per share paid for 1HFY2022, this brings the total full-year dividend to 5.0 cents per share, which is the same as last year.

Hui Choon Kit, CEO of F&N says: “While we continue to act proactively to navigate this inflationary environment, and take deliberate steps to further enhance our resiliency, we're doubling down on the strategies that have been working well and delivering results. Building on the strong 4QFY2022 momentum, we'll continue to drive productivity improvements to fund growth investments, mitigate input cost challenges and to maintain balanced top- and bottom-line growth.”

Shares in F&N closed 1.68% higher on Nov 10 at $1.21.

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