KUALA LUMPUR: Fraser & Neave Holdings Bhd’s (F&N) net profit for the third quarter ended June 30, 2019 (Q3) rose to RM114.94 million from RM104.50 million in the same period last year. Revenue increased 10.9 percent to RM1.07 billion from RM961.89 million a year ago with higher contribution from the food and beverage (F&B) segment from Thailand and Malaysia.
In a filing with Bursa Malaysia yesterday, the company said the overall domestic market for F&B Malaysia is expected to remain challenging, given the intense competition, especially in the canned milk segment.
“For beverages, the management has taken the necessary actions, including introducing extensive portfolio of healthier options, to mitigate the impact of the excise duty on sugar sweetened beverages effective July 1, 2019. “The management will also continue to monitor market acceptance and off-take while continuing our efforts to introduce innovative products that will meet our consumers’ needs,” it said.
On the other hand, F&N said its Thailand operations had better prospects following improvement in both sweetened condensed and evaporated milk segments. The group said investment in brand building would be continued to strengthen product portfolio by increasing advertising and promotions investment significantly in the last quarter of this financial year.
For exports, it said slower off-take from key customers and geo-political tensions in the Middle East have affected sales in certain markets.
“The strengthening of Thai baht has also reduced our export competitiveness from Thailand. Despite the challenges, we would continue our efforts to build the exports pillar by increasing and deepening our presence in new and existing markets,” it said.
On another note, the group said raw and packaging material prices are expected to remain volatile, thus it had hedged most of its core commodity requirements and corresponding foreign currency exposure wherever possible for the remaining quarter of the current financial year.
Moving forward for the next financial year, F&N said the dairies input prices that had increased would be closely monitored and necessary actions would be taken to mitigate any adverse impact.
The group would also continue to prioritise on strengthening its commercial strategies, routeto-market execution, accelerating innovations and improving operational efficiencies across the businesses to generate profitable and sustainable growth, it said. Given the uncertain external environment, the group will continue to be vigilant and, at the same time, explore new growth opportunities that may arise, it added. – Bernama
