F&N’s Q2 net profit falls on higher input, promotion costs

PETALING JAYA: Fraser & Neave Holdings Bhd (F&N) reported a 13.6% decline in net profit to RM92.57 million for the second quarter ended March 31, 2018 compared with RM107.08 million in the previous corresponding year, due to higher input costs especially for dairy products, higher advertising and promotions expenditure and sales incentives for Chinese New Year festive promotions.

Revenue, however, rose 2.2% to RM1.01 billion from RM992.74 million.

F&N has proposed an interim dividend of 27 sen per share for the quarter under review amounting to RM99 million, payable on June 7.

F&N’s first-half net profit fell 14.9% to RM199.4 million from RM234.36 million, while revenue was flat at RM2.08 billion.

Commenting on outlook for the rest of the year, F&N chairman Tengku Syed Badarudin Jamalullail said the business environments in both Malaysia and Thailand will continue to be challenging with prolonged weak consumer sentiments and intensifying competitive price pressure.

The group expects raw and packaging material prices in subsequent quarters to remain volatile following the uptrend in packaging and milk-based commodity prices and oil prices.

“The group has hedged its core commodity requirements for the financial year along with the corresponding foreign currency exposure wherever possible.”

F&N said it will continue to remain vigilant and take decisive actions in managing the changes in external environment to ensure sustainable growth for its business.