SINGAPORE: Beer, soft drinks lift Fraser & Neave's H1 sales
- H1 net profits slip by 2.4% SGD299.8m (US$240.7m)
- Operating profits fall by 0.6% to SGD522.6m
- Net sales increase by 7% to SGD2.93bn
- Group profits cycle one-off gain in first-half of previous year
Soft drinks, Asia Pacific Breweries boost Fraser & Neave in H1
Brewery acquisitions and strong soft drinks demand went some way to offsetting difficult conditions in Fraser & Neave's dairy division in the first half of its fiscal year, but group profits still fell.
Soft drinks sales leapt by almost a fifth in the second quarter, with profits in the group's soft drinks division up by a third on the same quarter of last year, Fraser & Neave (F&N) said today (13 May).
This performance, together with a strong showing by the firm's beer venture with Heineken, Asia Pacific Breweries, drove Fraser & Neave's net sales up by 7% for the six months to the end of March, to SGD2.93bn (US$2.35bn).
However, rising input costs damaged profitability at F&N's dairies division over the first-half. This contributed to a 0.6% dip in operating profits for the half-year, to SGD522.6m. Net profits fell more sharply, by 2.4%, to SGD299.8m.
"Lower earnings were due to reduced profit contribution from Development Property following construction completion of overseas projects and the divestment of two retail malls," said the group.
F&N's chairman, Lee Hsien Yang, said that the first-half performance was "credible". Despite the fragility of the global economy, he said that Asia's "sizable population, rising disposable incomes [and] growing consumerism are some reasons for us to remain positive about the region's long-term prospects".
For the second quarter, F&N's net profits fell by 16% to SGD143.3m. Operating profits dropped by 11% to SGD240.6m, but net sales increased by 4% to SGD1.37bn.
To view the full company announcement, click here.
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