Robust results for F&N despite lockdowns
The Aidilfitri festive season sales were better than last year for both beverages and dairies.
Fraser & Neave Holdings
KUCHING: Fraser & Neave Holdings Bhd’s (F&N) net profit increased to RM96.16 million for the third quarter ended June 30, 2021 (3Q21), from RM93.85 million in 3Q last year.
Revenue had also improved to RM1.06 billion from RM918.07 million previously due to the maiden contribution from its recently acquired subsidiary, Sri Nona, it said in a filing with Bursa Malaysia.
Its food and beverage (F&B) Malaysia revenue for 3Q21 rose by 17.1 per cent to RM540.2 million from RM461.4 million previously as revenue from the domestic market grew from ramp up in sales in the run up to Hari Raya Aidilfitri, the Harvest festive season and Ramadan Bazaars in operation.
“The Aidilfitri festive season sales were better than last year for both beverages and dairies. However, the positive sales momentum was disrupted in June amidst the Full Movement Control Order (MCO) lockdown.
“Food business (Sri Nona) also contributed to the growth for the Aidilfitri season from the sale of rice cakes (ketupat) and other products with the increase of inhome consumption,” it said.
The group said F&B Thailand also saw a very encouraging performance, as revenue grew by 13.6 per cent to RM517.9 million in Q3 2021 from RM455.8 million in Q3 2020, partly offset by the unfavourable Thai baht-ringgit translation.
“The positive revenue contribution from both F&B Malaysia and F&B Thailand, as well as the maiden contribution from Sri Nona, contributed to the growth in the group’s year-todate revenue, which rose by 6.6 per cent to RM3.23 billion from
RM3.03 billion in 2020,” it added.
Despite the movement restrictions, it had boosted its store presence and partnered with its F&B merchants for combo meals and do delivery tieups, observed researchers with MIDF Amanah Investment Bank Bhd (MIDF Research).
“It continued to scale up its F&N Life platform during the period. The better sales was offset by higher input costs, higher freight charges, restructuring costs and other Covid-19 related expenditure,” it said yesterday.
“While the business environment remains challenging for the company due to the going pandemic in Malaysia and Thailand, we reckon that the company will be able to rake in reasonable sales as the consumption pattern shifts to in-home.
“Looking ahead, we think that consumption will pick up further when the economies reopen.”
So far, F&N has managed to rake in sales growth during the pandemic and managed its cost reasonably well despite the challenging environment, which puts them at a better position when the situation improves.
The team at Kenanga Investment Bank Bhd (Kenanga Research) also saw that F&N was poised for growth, as Malaysia’s herd immunity target by December 21 was a welcome boost for F&N given its resilience in this pandemic period.