Gardenia bread maker QAF posts 11% drop in Q3 profit

QAF, which is known for its Gardenia bread, has reported an 11 per cent drop in third quarter net earnings to $3.8 million.

Revenue for the three months to Sept 30 was up 4 per cent at $250.8 million.

All business segments comprising bakery, primary production and the trading & logistics business segments saw increases in sales.

In particular, its bakery operations in Singapore, Malaysia, the Philippines and Australia achieved increases in sales through the launch of new products and increased market shares.

The group's fully integrated producer of meat located in Australia, Rivalea (Australia), achieved higher sales as a result of an increase in sales volume.

Trading & logistics business segment achieved higher sales as Ben Foods (S), the group's wholly-owned trading and distribution company, increased sales in both the domestic and export markets.

The group's cold storage facility under NCS Cold Stores (S) also saw increased sales.

On the other hand, Rivalea faced weaker-than-expected overall selling prices. This, along with higher animal feed and other production costs, led to a squeeze on margins.

However, bakery operations achieved increases in profitability due to higher sales of newly launched products as well as production efficiencies.

The group's dairy and other business activities in Australia also achieved an increase in profitability.

Overall, pre-tax profit decreased by 17 per cent to $5.5 million.

Earnings per share fell to 0.7 cent compared to 0.8 cent previously while net asset value per share eased to 70.9 cents compared to 74.8 cents as at Dec 31.

On its prospects, QAF noted that revenue is expected to increase for the full year.

It is expected to continue to face relatively high raw material and other operating costs for the rest of the year.

Despite this, the group expects to achieve an encouraging level of profit.