F&N Holdings Saw Its FY2021 Revenue Grow But Profits Dropped 8%

Fraser & Neave Holdings Bhd recorded a revenue of RM896.3 million for its fourth quarter, reflecting a 6% decline from last year against a backdrop of COVID-19 lockdown in both Malaysia and Thailand where the group operates.

As for its Malaysia operations, the prohibition and restrictions imposed during MCO adversely affected revenue with the quarter declining by 7.5% to RM457.9 million (Q4 FY2020: RM495.1 million), however, this was partially offset by higher exports and contributions from the Food business. While the lockdown in Thailand also impacted domestic sales, F&B Thailand was able to sustain marginal growth of 0.6% in revenue (in Thai Baht terms), contributed by high double-digit growth in exports due to new customers and higher orders. However, unfavorable exchange rates translated to lower revenue which declined by 4.8% to RM436.2 million (Q4 FY2020: RM458.0 million).

Group profit before tax for the quarter contracted to RM61.9 million from RM108.3 million last year mainly due to a sharp rise in commodity prices, particularly sugar, palm oil and milk-based commodities, restructuring expenses and partially mitigated by an improvement in margins for the export business.

As for the financial year, the group saw its revenue grow 3.6% to RM4.13 billion (FY2020: RM3.99 billion), driven by a strong export performance by both F&B Malaysia and F&B Thailand, as well as nine months of contribution from Food business. It recorded a profit before tax of RM479.4 million (FY2020: RM522.9 million). The contraction is attributed to higher commodity prices, lower export margins, restructuring and COVID-related expenses, and a lower share of profit from an associate.

F&NHB Chief Executive Officer, Lim Yew Hoe said, “FY2021 was undoubtedly difficult in both demand and cost aspects. However, we remained steadfast in our long-term priorities and launched a fourth business pillar – Halal Packaged Food – with the acquisition of Sri Nona Companies.

He added that contributions from diversified product and geographical presence was key to the Group’s resilient performance for the year. Prudent cost management partially mitigated higher commodity prices and higher freight and warehouse costs. Cognisant of the economic constraints on households spending, there was also a delay and phasing of price increase for its dairy products in Malaysia.

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