Beverage firm Fraser and Neave (F&N) posted weak second-quarter results owing in part to weak consumer sentiment.
Net profit for the three months ended March 31 plunged 67.1 per cent year on year to $3.82 million before exceptional items, the firm reported yesterday. Revenue slid 5.8 per cent to $451.28 million.
F&N attributed the revenue decline to "weak consumer sentiment and the absence of contribution from Chinese New Year sales due to the earlier sell-in booked in the first quarter of 2017".
Higher finance cost - due to borrowings to finance the acquisition of Vinamilk shares - weaker beverage and concentrate sales, and higher marketing expenses also weighed on its bottom line.
The firm said turnover fell despite growth in the dairies segment and contributions from the newly acquired vending business.
Dairies revenue in the second quarter was $271.6 million, up by 2.4 per cent from the corresponding period last year, driven by better sales in Singapore, Thailand and Myanmar.
AT A GLANCE
REVENUE: $451.28 million (-5.8%)
NET PROFIT: $3.82 million (-67.1%)
DIVIDEND: 1.5 cents per share
F&N said the overall beverage revenue was 21.5 per cent lower year on year at $113.6 million due to slower sales in Singapore and weak consumer sentiments in Malaysia.
The group has some businesses other than beverage. Its printing and publishing business also suffered a revenue dip, off 4.5 per cent to $66 million.
The weaker showing dragged half-year net profit lower by 29.3 per cent to $26.27 million, while revenue dropped by 2.7 per cent to $946.31 million.
Mr Koh Poh Tiong, chairman of the F&N Board executive committee, said: "Even though our performance for the first six months was adversely impacted by weaker regional economies, poor consumer sentiment, more cautious discretionary spending and rising input costs, we continue to maintain our leading positions in our core markets."
F&N will continue to invest in its portfolio of brands as well as "strengthening our route-to-market and penetrating deeper into new markets of Indonesia, Myanmar and Vietnam", Mr Koh added.
Quarterly earnings per share was 0.6 cent, down from 0.8 cent a year earlier - even after an exceptional gain in the second quarter. Net asset value per share was $1.97 as at March 31, unchanged from the end of September last year.
The firm announced an interim dividend per share of 1.5 cents, unchanged from the previous year.
The counter rose by one cent to $2.40 yesterday before the results were released.