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Thread: F&N Q1 net profit tumbles 18% to $89m

  1. #1
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    Default F&N Q1 net profit tumbles 18% to $89m,00.html?

    Published February 14, 2009

    F&N Q1 net profit tumbles 18% to $89m

    One bright spot is the encouraging response to the company's latest property launch


    LOCAL conglomerate Fraser and Neave (F&N) yesterday posted weaker results for the first quarter ended Dec 31, 2008 as its property segment bore the brunt of an earnings decline.

    The group's Q1 net profit attributable to shareholders was $88.98 million, down 18 per cent from the same period last year, after including $29.2 million in fair value gain on investment properties and $7.7 million in exceptional gain (mainly from negative goodwill arising from the acquisition of an associate).

    Excluding these items, net profit would have fallen by almost 50 per cent to $52.06 million. The group's share of losses of associated firms totalled $28 million for the period, against a share of profits of $2.4 million a year ago.

    Group revenue also weakened by 6 per cent year-on-year to $1.24 billion in Q1.

    F&N's property arm was hit by several factors, including a $12 million allowance for foreseeable losses on an overseas property development project, fair value losses on financial assets and unrealised exchange losses on foreign currency loans in associated companies.

    Profit before interest and taxation (PBIT) for investment property and development property activities totalled $57.82 million in Q1 - 44 per cent lower than a year ago.

    This has led the group to adopt 'a cautious stance to preserve capital, by selectively launching projects, with the goal to achieve an optimal long term return commensurate with risks within the global markets', according to a press release.

    One bright spot is the encouraging response to F&N's latest property launch. Some 350 units at Caspian were sold, and the take-up rate has boosted the group's confidence in the mass-market residential segment.

    F&N's food and beverage arm 'continued to show remarkable resilience in these uncertain times', said the group. The segment's PBIT rose 9 per cent from a year ago to $83.6 million in Q1.

    However, performance within the segment varied. While the soft drinks, breweries and glass containers businesses did better, the dairies business was affected by losses from an associated company. PBIT from the printing and publishing arm weakened by 8 per cent to $14.1 million in Q1.

    As of Dec 31, F&N had $1.69 billion of borrowings repayable within a year and it said it has secured financing of $1 billion. 'We are well able to service our debt,' it reassured.

  2. #2
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    Default F&N profits hit by property losses, but APB's contribution up

    February 14, 2009 Saturday

    F&N profits hit by property losses, but APB's contribution up

    By Joyce Teo

    CONGLOMERATE Fraser and Neave (F&N) has posted an 18 per cent slump in first quarter net profits to $89 million, mainly as a result of various losses in its property business.

    On the bright side, F&N said its food and beverage operations, which includes various high-profile soft drinks, performed well in the quarter ended Dec 31.

    Overall revenue slipped 6 per cent to $1.24 billion, F&N announced yesterday.

    It said key property losses included an allowance of $11.7 million for foresee- able losses in an overseas property development project, and a loss of $19.5 million for its share in Frasers Commercial Trust.

    It also absorbed its share of property revaluation losses of $7.5 million suffered by an associated firm in Britain.

    Although profits from its property business slumped from $44.39 million to $25.9 million, this remains the group's biggest profit contributor.

    Revenue from property development fell 30 per cent to $220.5 million, largely due to a fall in contributions from China and Britain.

    Looking ahead, F&N said it has adopted a cautious stance to preserve capital by selectively launching projects. Its latest launch Caspian was well received. Frasers Centrepoint Homes has sold 350 apartments in the 712-unit condo and will be releasing another 200 units for sale today at about $600 per sq ft on average.

    The group's soft drink business posted a 19 per cent rise in pre-tax profits 'on higher volume and improved efficiency''.

    F&N's investment property business posted a loss of $7.2 million, compared with a gain of $19.8 million a year ago.

    The breweries business is the No. 2 profit contributor, accounting for $19.68 million in earnings, up from $18.3 million. Its revenue contribution of $378 million is the largest of all the businesses.

    Revenue from the dairy business fell 8 per cent to $234 million due to a decline in export volume and weaker sales in Thailand. Net earnings slipped into the red.

    As at Dec 31, the group has secured financing of $1 billion for the $1.7 billion of loans due in the next 12 months.

    In a separate statement, F&N unit Asia Pacific Breweries (APB) reported a 13.4 per cent rise in net profit to $48.3 million for its first quarter that ended Dec 31. Revenue rose 2.2 per cent to $580.2 million.

    'APB is heartened to post first quarter gains amid a very demanding economic climate,' said its chief executive Roland Pirmez. It will keep reviewing investment plans in the light of the current environment and invest selectively to support future growth and boost its competitiveness.

    The operating environment will remain challenging in the next 12 months, APB added.

    F&N's earnings per share were 6.4 cents, down from 7.8 cents a year earlier.

    Net asset value per share was $3.76 as at Dec 31, down from $3.80 as at Sept 30.

    F&N said its diversified business operations are expected to enable it to better withstand the significant challenges in this difficult economic climate.

    Shares of F&N closed two cents higher yesterday at $2.90.

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