F&N posts 4Q net profit of RM66.2m, dividend 62c

KUALA LUMPUR (Nov 4): Fraser & Neave Holdings Bhd (FNHB) posted net profit of RM66.21 million in the fourth quarter ended Sept 30, 2011 , down 85.7% from the RM462.31 million a year ago due to a gain on RM382.03 million from the divestment of its glass container business a year ago.

It said on Friday revenue rose just 0.5% to RM995.46 million from RM990.25 million a year ago which had included revenue from the sale of Ampang development project of RM54 million. Earnings per share were 18.44 sen compared with 129.70 sen. It proposed a final single tier dividend of 47 sen per share together with a special single tier dividend of 15 sen.

For the financial year ended Sept 30, its net profit was RM383.13 million, down 44.8% from RM695.29 million a year ago that included the RM382 million gain on divestment of the glass business. Its revenue rose 7.6% to RM3.915 billion from RM3.637 billion.

FNHB said operating profit from continuing operations rose 14% to RM443.80 million from RM389.30 milion despite higher input costs and sugar subsidy withdrawal in Malaysia.

“It marks another new record and the 11th consecutive year of steady growth for the group,” it said.

FNHB chief executive officer Datuk Ng Jui Sia said: “Despite current challenges that we are facing in terms of higher input costs and the global economic and financial uncertainties, our core business in food and beverages remains strong, with solid growth from soft drinks and broad-based growth in dairies Thailand.”

Ng said the soft drinks division recorded all-time sales record of 69.8 million cases whilst maintaining market share. Revenue was up 16% to RM1.84 billion from RM1.59 billion last year due to good growth from the core brands and promising performance of new products. Operating profit surged 41% to RM274 million from RM194 million.

As for the dairies division, its registered lower volume due to the numerous price increases to offset the higher sugar costs. As for the dairies Thailand, he said FNHB achieved a broad-based domestic volume growth of 9%.

“We made greater inroads into Indochina with a 40% growth and started to move to Vietnam with the appointment of a local distributor,” he said

Commenting on the prospects, Ng said in the absence of Coca-Cola products, the soft drinks division will see an immediate fall in sales volume in the new financial year.

However, he was added the division has focused on deepening and widening its product portfolio over the last few years to prepare for this eventuality.

As for dairies products in Malaysia, he expected it to remain soft, due to the continuation of the selective sugar subsidy policy and volatility in raw material prices globally.

Ng also said in the first half of FY2012, he said the dairies division would be moving to the RM350 million Pulau Indah plant which would increase operating costs in the short term but lead to long term benefits of increased productivity.

He added once operations started in December 2011 or January 2012, the group would be able to crystallise a deferred tax asset of RM76 million in relation to the halal hub tax incentive.

As for the dairies plant at Rojana, Thailand, he said it had temporarily ceased operations due to the massive floods.

“We expect production to recommence approximately three to five months after flood waters recede. To mitigate disruptions to the marketplace and customers, we have plans to ship products from outsourced manufacturing locations.

“We have in place an all risk insurance policy for the business in Thailand. The total sum insured is Baht 5 billion and the indemnity period is for twelve months.”

Ng pointed out the group’s overall results would be bolstered by the non-operating items of deferred tax income.