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Thread: F&N Q2 net profit soars 71% to $107m

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    Default F&N Q2 net profit soars 71% to $107m

    Published May 12, 2007

    F&N Q2 net profit soars 71% to $107m

    By CONRAD RAJ


    THE strong performance of the property sector and contributions from brewery operations underpinned second-quarter earnings and revenue growth at Fraser & Neave.

    Net profit attributable to shareholders for the three months ended March 31, 2007, shot up 71 per cent to $107 million from $62.78 million for the previous corresponding period.

    Before exceptional items, the second quarter earnings were $104 million, 80 per cent up from $57.7 million a year earlier.

    The results were achieved on a 31 per cent increase in revenue to $1.09 billion from $833.3 million a year ago, buoyed by strong sales by property development and brewery operations as well as sales by the canned liquid milk business acquired from Nestle, the company said.

    Q2 profit before interest and tax (PBIT) was $200 million, up 57 per cent from a year earlier, was boosted by non-recurring items totalling $41.8 million and higher sales.

    The non-recurring items, while operational in nature, were one-off and comprised mainly $25.4 million from the disposal of an interest in a China development site, $11.9 million from the disposal of investments and $4.5 million recovered from an aborted project.

    Q2 earnings per share after exceptional items rose to 8 cents from 5.4.

    Excluding the one-off gains, PBIT and attributable profit improved a 'normalised' 24 per cent and 33 per cent respectively.

    The company closed the first half of the year with all major financial metrics at new highs.

    Revenue grew 23 per cent to $2.19 billion, while PBIT increased 37 per cent to $370 million.

    Net earnings after exceptional items went up 39.8 per cent to $183.7 million from $131.4 million a year earlier.

    The company said the record performance was achieved on the back of a higher contribution from its property division, which accounted for $210 million or 57 per cent of group PBIT, up from 50 per cent previously.

    F&N group chief executive Han Cheng Fong said: 'The strong half-year financial performance is testament to our successful growth and diversification strategies.

    'Our property division continues to benefit from strong take-up rates in home sales, high demand for office space and higher rental rates for retail malls and serviced residences,' he added.

    'Likewise, our food and beverage businesses continue to show resilience in spite of highly competitive conditions compounded by rising raw material and packaging costs, while our business of publishing and printing is showing signs of turning for the better,' said Dr Han.

    Meanwhile, subsidiary Asia Pacific Breweries reported a 1.8 per cent rise in Q2 net earnings to $38.65 million from $37.97 million a year ago, largely because of higher taxes.

    This was on a 26 per cent rise in revenue to $449.43 million from $356.58 million previously.

    Net profit for the half-year was up 0.6 per cent at $79.1 million and revenue rose 14.3 per cent to $925.7 million.

    APB chief executive officer Koh Poh Tiong said: 'Fundamentally, the business remains sound, as shown by the stronger organic profit growth rates achieved.

    'APB must continue to be an expansionist company where we will continue to invest for future growth although short-term results could be affected.

    'This investment is similar to that many years ago when APB took a calculated risk and invested in Indochina,' Mr Koh added.

    'Today, we are continuing to reap the fruits of our first-mover advantage from that region which has maintained its lead as APB's largest volume and profit contributor,' said Mr Koh.

    F&N has proposed a 25 per increase in its interim dividend to five cents a share despite an enlarged capital base.

    Meanwhile, APB is recommending an interim dividend of 14 cents a share.

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    Default Re: F&N Q2 net profit soars 71% to $107m

    May 12, 2007

    F&N sizzles with record $184m gain at half time

    Sterling showing by property, brewery units lifts quarterly earnings by 70%

    By Arthur Poon


    PROPERTY and beer proved a winning combination for Fraser and Neave (F&N), which posted a 70.6 per cent increase in second-quarter net profit to $107 million yesterday.

    Revenue was also buoyant, up 30.9 per cent at $1.09 billion for the period ended March 31.

    F&N achieved a record net profit of $183.7 million for the six months, up 40 per cent, on the back of a 22.5 per cent rise in revenue to $2.19 billion.

    While its brewery assets did well, property development remained the group's best-performing division. Its revenue grew by 48.1 per cent to $609.4 million, driven by strong local and overseas residential sales, and higher profit margins in Singapore.

    Chief executive Han Cheng Fong said: 'Our property division continues to benefit from strong take-up rates in home sales, high demand for office space and higher commercial rental rates.'

    The group said its launches - One St Michael's, ClementiWoods and St Thomas Suites - received overwhelming responses. Its unit Frasers Centrepoint will launch a 470-unit residential project next to the Novena MRT Station later this year.

    Revenue from investment property, including property trusts, rose 11 per cent to $117 million.

    Its dairy business grew 46.3 per cent to $291.4 million, boosted by higher sales and the recognition of sales from the canned liquid milk business - acquired from Nestle - since February.

    While sales volume at the soft drinks unit rose 5 per cent, revenue grew only a modest 1 per cent to $241.9 million after accounting for currency exchange.

    'Our food and beverage businesses continue to show resilience in spite of highly competitive conditions compounded by rising raw material and packaging costs, while our business of publishing and printing is showing signs of turning for the better,' Dr Han said. F&N's publishing and printing sales rose 5 per cent to $263.4 million, following its recent acquisition of Panpac Education.

    It has declared an interim tax-exempt dividend of five cents per share, up from four cents last year.

    Earnings per share for the first half rose to 14.6 cents from 11.2 cents previously, while net asset value per share stood at $3.41 as at March 31, up from $3.07 as at Sept 30 last year.

    Asia Pacific Breweries (APB), 39.7 per cent owned by F&N, also reported higher turnover yesterday. Revenue grew 26 per cent to $449.4 million in the second quarter, while net profit was up 1.8 per cent at $39 million.

    Sales at APB, maker of Tiger beer, were boosted by the Chinese New Year and Vietnamese Lunar New Year holidays, as well as its acquisition of Fosters' brewery assets in Vietnam.

    APB, which has 31 breweries in 10 countries, hopes to add four more plants in China, Mongolia, Laos and India by the first quarter of next year.

    It announced an interim tax-exempt dividend of 14 cents a share.

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