F&N: 2023 to remain challenging amid rising raw material prices, supply chain instability

Fraser & Neave Holdings Bhd (F&N) expects the business environment in 2023 to be as challenging as last year, with increasing prices of raw materials, potential instability in global supply chains, and the risk of a recession that will have repercussions across the entire commodity landscape.

Chief executive officer Lim Yew Hoe said the group would continue to strengthen its cost management measures amid expected inflation for commodity goods and raw materials, as well as lingering effects from the COVID-19 pandemic, such as supply chain disruptions and heightened freight costs.

Nevertheless, he highlighted that this would not remove the focus on business building, especially in capitalising on the synergies that Cocoaland Holdings Bhd and Ladang Permai Damai Sdn Bhd’s businesses bring into the group.

Lim said F&N successfully navigated 2022 to remain resilient and had good reason to look forward to a reinvigorated financial year 2023 (FY2023).

"Our overall performance in FY2022, especially in the fourth quarter (4Q), had given us ample reasons for optimism.

"In 4Q, we began to see improved margins, attributable to the effective strategies we have put in place in response to the challenging marketplace,” he said in a statement issued following the company’s 61st annual general meeting (AGM) today.

Lim said F&N is also beginning to see the results of the group’s unwavering focus on its long-term strategies for growth and efficiency.

"We had been able to follow through by completing our acquisition and capital expenditure (capex) plans in 2022.

"The investments we made in recent years are bearing fruit today,” he added.

Citing an example, Lim said the completion of several capex projects, such as the integrated warehouse and solar photovoltaic system, had contributed to savings and cost efficiencies in FY2022.

F&N chairman Tengku Syed

Badarudin Jamalullail said the group is also entering a new and exciting era as it expands into new sectors such as dairy farming, confectionery and halal food products.

"Having weathered the storms of the last few years, our team is more united and cohesive than ever.

"I am proud of our people, who have shown so much resilience in the face of multiple global and domestic challenges,” he added.

Meanwhile, shareholders at the AGM approved the payment of a final single-tier dividend of 33 sen per share, bringing the total dividend to 60 sen per share for FY2022, payable on Feb 10, 2023.