KUALA LUMPUR: Fraser and Neave Holdings Bhd (F&N) recorded a net profit of RM385.4 million in the full-year ended September 30, surging 37.6 per cent from RM280.1 million in the same period a year ago, due to favourable milk-based global commodity prices and manufacturing efficiencies.
The group maintained its year-on-year growth despite challenging market conditions with higher revenue of RM4.17 billion in the full-year period, which rose 1.5 per cent from RM4.11 billion a year ago. However, its net profit declined 13 per cent to RM49.59 million in the fourth quarter ended September 30 from RM56.72 million a year earlier, mainly due to softer market conditions and consumer confidence post-Hari Raya as well as timing of Hari Raya sell-in period year-on-year.
Chief executive officer Lim Yew Hoe said the group would remain vigilant and respond to changing market dynamics while proactively focusing on appropriate measures to maintain its competitiveness. “In the immediate term, the softer domestic and global economic environment, and escalating commo-dity prices do pose a challenge to sustain the pace of growth,” he said yesterday. Lim expects a consistent single- digit growth in the financial year ahead driven by its flagship product 100Plus, expansion in Thailand and new marketing initiatives to ride on the Southeast Asian Games.
“We are expanding to the north east of Thailand. We are looking for distributors and wholesalers in the area to expand our products there, “Thailand has about three times the population of Malaysia. There is a lot of scope for us to grow our business there,” he said. F&N has spent a total capital expenditure (capex) of RM300 million over two years and will spend another RM70 million to increase its capability across the group to capitalise on future market growth. The RM70 million capex will include a new 600 barrels per minute water line, expansion of the warehouse, production building and infrastructure at its existing plants. Analysts are positive on F&N’s venture in Thailand despite the current uncertainty in the market. “Their growth performance in Thailand is better than we earlier expected.
“We are positive on their expansion plan in Thailand, which will support the future growth of the company,” it said. However, analysts still remain cautious on commodity prices, which have a significant impact on the company’s overall cost. “Provided they have not hedged against the sugar price, they might go through a tough time ahead. “They may have to stick to their prices despite the increase in cost of commodities, to remain competitive in the market.
