Beverage firm Fraser and Neave (F&N) posted improved third-quarter results owing to a higher stake in a Vietnamese dairy firm.
Net profit soared 59.9 per cent to $60.7 million for the three months to June 30 before exceptional items, the firm reported yesterday.
If exceptional items were included, net profit rocketed to $1.26 billion from $38.6 million in the same period a year earlier.
The firm said the increase came mostly from its higher stake - now 18.74 per cent - in Vietnam Dairy Products Joint Stock Co (Vinamilk).
That also boosted dividend income and led to more earnings from the dairies segment, as profit from Vinamilk was recognised for the first time, starting from April 16.
Quarterly revenue slid 8.6 per cent to $483 million.
F&N reported the food and beverage division had earnings grow 44 per cent to $85.2 million. It added that revenue reported for the beverage segment alone was 17.1 per cent lower compared with last year.
"Despite healthy sales volumes in Singapore due to the Hari Raya festivities, pricing pressures from competitors resulted in a decrease in sales revenue.
AT A GLANCE
Q3 REVENUE: $483 million (-8.6%)
Q3 NET PROFIT: $60.7 million (+59.9%)
"In Malaysia, weak consumer sentiment amid higher inflation and subdued Hari Raya sales led to the decrease in revenue," said F&N.
However, the beverage segment's turnover was helped by contribution from a vending business acquired in July last year, and the distribution of third-party brands.
"Revenue for the Singapore beer business also increased as a result of strong growth momentum in all distribution channels," F&N added.
In the dairies segment, revenue dipped 3.3 per cent to $276.1 million compared with the same period a year ago.
Turnover in Singapore and Malaysia decreased owing to "weaker consumer sentiment and competitive price pressure", said the firm.
It added that the drop was partly offset by better export sales, and sales in the Myanmar market, seen as gaining traction.
F&N said: "In the markets where the group operates in, consumer sentiments in the food and beverage segment are expected to remain subdued against a backdrop of continuing cost and pricing pressure."
However, it is optimistic about the beverage segment in Vietnam and Myanmar, and "will continue its investments in new markets while seeking new opportunities in the food segment".
Quarterly earnings per share was 4.2 cents, compared with 2.6 cents a year earlier, before exceptional items. Net asset value per share was $1.98 as at June 30, compared with $1.97 as at Sept 30.
F&N shares fell five cents to $2.34 yesterday before the results were released.