Strong US$, higher distribution costs eat into Petra Foods' earnings

SINGAPORE - Chocolate maker and consumer goods distributor Petra Foods reported a decline in earnings owing to higher distribution costs, increased brand building investments and weaker regional currencies.

Net profit from continuing operations in the fourth quarter ended Dec 31 fell 21 per cent to US$12.3 million (S$15.4 million), even though revenue crept up 0.6 per cent to US$131.2 million.

Selling and distribution costs rose 3.4 per cent to US$18.1 million while other operating income fell 72.1 per cent to US$1.2 million.

Net profit from continuing operations for the full year dropped 17.8 per cent to US$48.7 million as revenue dipped 0.9 per cent to US$504 million.

The company said its results were affected by the weakness in the regional currencies when translated into its United States dollar reporting currency.

In particular, it noted that the Indonesian rupiah weakened by an average of 15 per cent in 2014.

It added that it would have achieved growth in its full-year revenue, earnings before interest, tax, depreciation and amortisation as well as profit after tax and minority interests in constant currency terms.

Earnings per share from continuing operations were 2.02 US cents, down from 2.56 US cents, while the net asset value per share rose to 48.6 US cents from 47.5 US cents.

Petra Foods has proposed a final dividend of 2.58 cents per share and a special dividend of 2.19 cents per share amounting to 4.77 cents per share.

It is lower than the final dividend of 2.06 cents per share and the special dividend of 3.08 cents per share totalling 5.14 cents a share given out in the previous year.

The company expects its performance in local currency terms to remain robust despite volatility in the regional currencies and input costs.

The firm's chief executive John Chuang said in a statement: "The need to adapt to constantly changing consumer habits in diverse local markets, macro environmental factors and market trends requires our organisation to be nimble and vigilant.

"We will look to outperform the competition through unceasing and accelerated innovation across all product categories as well as increased market penetration."

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