F&N posts lower Q2 earnings, declares 27 sen dividend

PETALING JAYA: Fraser & Neave Holdings Bhd’s (F&N) net profit for the second quarter ended March 31, 2022, contracted 9.3% to RM93.9 million compared to RM103.5 million last year due to flood and restructuring costs.

However, the group’s revenue increased by 1.5% to RM1.11 billion compared with RM1.09 billion in the same quarter last year, supported by F&B (food & beverage) Malaysia’s improved performance.

Higher sales, improved margins from price adjustment and prudent cost management led to higher operating profit for F&B Malaysia in Q2’22. F&B Malaysia’s operating profit excluding one-off non-operating items (flood and restructuring costs) surged 59.3% to RM43.9 million.

For the six months period, F&N’s net profit decreased 22.3% to RM186.8 million from RM240.3 million in H1’21 due to higher commodity prices, flood impact, and forex translation loss from a weaker Thai baht; while revenue increased 1.8% to RM2.21 billion from

RM2.18 billion last year.

F&N declared an interim single-tier dividend of 27 sen per share amounting to RM99 million will be paid on May 31, 2022.

On prospects, the group anticipates the challenging environment for the industry to continue into the second half of the year, as high input prices, rising freight costs, and geopolitical uncertainties weigh on the group’s margin while rising inflationary pressures may dampen discretionary spending.

However, the reopened borders and relaxation of quarantine requirements are expected to spur economic activity and consumer spending.

“For the longer term, we are on track for several other capex projects that will enable the group to capture value in new market segments. Our new RM20 million drinking water production plant and warehouse in Kota Kinabalu signal our confidence and commitment to grow the drinking water business in Sabah,” F&N CEO Lim Yew Hoe said in a bourse filing.