Fraser and Neave profit down 16% to $185M
3Q12 decline wasn't due to weak operations though, the F&B firm insists.
As proof, Fraser and Neave pointed out that revenue and profit before interest and taxation for the third quarter ended 30th June 2012 (“3Q2012”) each grew 4 per cent to $1,430 million and $246 million, respectively, driven by strong sales in Food & Beverage (“F&B”), particularly Beer and Dairies.
Rather, the blame was levied on an inflated base due to a large disposal gain. "Profit after tax declined 16 per cent to $185 million, mainly due to the absence of a gain from the disposal of an associated company in 3Q2011," Fraser and Neave said.
The firm said its F&B sector, in particular, delivered another set of good quarterly results.
"Riding on its regional footprint and strong brands, Beer profit grew 34 per cent on higher volume and improved margins. In Soft Drinks, FY2012 marked a new and exciting era for this division. Equipped with strong brands and local knowhow, the Group continued to vigorously defend its leading positions in Singapore and Malaysia with relentless focus on brand- and market-building campaigns, as well as strengthening its route-to-market," Fraser and Neave said.
"This quarter, all soft drinks’ brands grew at double-digit rates in Malaysia, with domestic sales recording 18 per cent growth. Despite volume growth, earnings of Soft Drinks were adversely affected by one-off overhead rationalisation charge. In Dairies, the Group’s Rojana dairy plant in Thailand returned to full production for all its products in mid-May 2012. Benefitting from strong consumer demand and shortage of supply, Dairies Thailand posted record quarterly revenue," it said
"Margins however suffered on higher cost of outsourced products and accounting for unabsorbed manufacturing overheads which arose from plant shutdown. In Dairies Malaysia, despite the removal of sugar subsidy, earnings improved due to higher export volumes and improved margins from favourable product mix. Consequently, overall Dairies 3Q2012 earnings improved 12 per cent to $15 million," it added.
"This quarter, earnings from Properties dropped 11 per cent to $89 million on an 8-per cent decline in revenue. The drop in earnings was largely due to a 10-per cent decline in revenue from Development Property. In compliance with INT FRS 115, revenue and income from pre-sold units in Australia and China, and executive condominium developments in Singapore were not recognised in this period. FY2011 figures were restated to be comparable with the current year’s results," it said further.
Fraser and Neave further noted though that for the nine months ended 30th June 2012 (“9M2012”), Group PBIT dipped 7 per cent to $721 million on a 5-per cent decline in revenue. It attributed lower earnings mainly to reduced profit contribution from Development Property and Soft Drinks.
"In the absence of one-off gains like the $105-million recorded in 9M2011 from the completion of corporate and debt restructuring of its overseas business, 9M2012 PAT fell 22 per cent to $554 million. Excluding exceptional items, PAT dropped marginally to $555 million, from $556 million on the same basis. Earnings per share was down 6 per cent against last year, at 27.5 cents. Net asset value increased 2 per cent to $4.94 a share, from $4.85 as at 30th September 2011," it said.