F&N’s fourth-quarter net profit up 26.4%, aided by lower spending, one-off gain

PETALING JAYA: Fraser & Neave Holdings Bhd’s (F&N) net profit jumped 26.4% to RM85.99 million for its fourth quarter ended Sept 30, from RM68.03 million reported previously due to prudent cost controls on overheads and lower advertising and promotions spending as well as a gain on disposal of its “Teapot” trademark .

Revenue for the period slipped 2.2% to RM953.7 million from RM975.09 million previously.

According to the group’s Bursa filing, its food & beverage operation in Malaysia saw operating profit improving by 50.2% following a RM7.8 million gain on disposal of its trademark. Excluding the one-off item, it saw a 8.3% growth driven by reduction in advertising and promotions expenditure and cost savings.

Meanwhile, its food & beverage business in Thailand saw an improvement of 20.5% to RM73 million on the back of a lower advertising and marketing spend, partially offset by the weaker Thai baht.

For the full financial year, the group has posted a net profit of RM410.38 million, a marginal improvement over RM410.26 million reported in the previous financial year.

Revenue for the period fell 2.2% to RM3.99 billion from RM4.08 billion previously.

In line with F&N’s earnings for FY2020, its board has recommended a first single-tier dividend of 33 sen per share. If approved it would result in a total dividend for the year to be of 60 sen per share.

With regard to the results, F&N’s CEO Lim Yew Hoe disclosed that it has fast tracked its e-commerce strategies in Malaysia to help consumers access its products during the movement control order.

On its outlook, he said the group remains cautious amid the Covid-19 pandemic along with the uncertainties on the local and global fronts.

“We will continue to focus on process improvements and digitalisation, and relentlessly pursue opportunities to build a stronger and more sustainable business for the future through continued investments in capex and our brands,” Lim said in a statement.

The group’s chairman, Tengku Syed Badarudin Jamalullail, commented that the performance reflects its solid foundation, enabling it to deliver better than anticipated results.

“We believe our strong fundamentals will see us through these challenging times and we can leverage on our strong balance sheet, bank facilities and low funding cost to support our operations and capitalise on opportunities that may arise,” he said.