F&N falls slightly behind expectations

KUCHING: Earnings from Fraser & Neave Holdings Bhd (F&N) fell slightly behind expectations as earnings for its third quarter of financial year 2017 (3QFY17) came in -25.9 per cent lower year over year (y-o-y) to RM69.4 million.

In a review by the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), the research arm explained that this brought cumulative first 9 months (9M) of FY17 earnings to RM303.7 million – accounting for 76 and 75 per cent of theirs and consensus full year earnings forecast respectively.

“This is slightly below expectation as historically in the past three years, the cumulative 9M earnings accounted for an average of 81 per cent of full year earnings,” explained the research arm.

Overall, the weaker- than- expected results were largely from the group’s 3QFY17 revenue declining by -6.1 per cent y-o-y to RM1.04 billion as the F&B Malaysia segment revenue continued to decrease by -14.0 per cent y-o-y to RM592.5 million.

Poor domestic sales were the result of weak consumer sentiment during the Hari Raya festive season coupled with intense pricing pressure from competitors, said the research arm.

While the effect was slightly mitigated by growing F&B Malaysia exports, F&N’s Malaysian operating profit still saw a -61.3 per cent y-o-y decline to RM24.2 million due to higher input costs in raw material (sugar) and restructuring efforts.

Meanwhile, F& B Thailand revenue grew by 6.9 per cent to RM448.6 million despite lower domestic volumes, aided by favourable RM-Baht translation and higher exports.

However, higher sugar prices caused its operating profit saw a decline of -2.4 per cent y-o-y to RM51.5 million.