Published August 8, 2009

F&N Q3 profit rises 11.7% to $123.2m

Revenue up 12.3%; Asia Pacific Breweries posts 39% increase in earnings to $51.9m

By NISHA RAMCHANDANI

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FRASER and Neave (F&N) posted a net profit - after fair-value adjustments and exceptional items - of $123.2 million for the third quarter ended June 30, 2009, 11.7 per cent higher year on year.

Excluding fair-value adjustments and exceptional items, net profit was 2.1 per cent higher at $118 million.

Revenue rose 12.3 per cent to $1.35 billion on the back of stronger contributions from most of its business segments.

Earnings per share were 8.9 cents (after fair-value adjustments and exceptional items) for Q3, versus 7.9 cents previously.

Revenue from its soft-drinks segment rose 15 per cent to $130 million while its investment property segment saw revenue growing 14 per cent to $84.5 million, thanks to high occupancies and higher rentals at malls, commercial buildings and industrial parks.

Revenue from property development jumped 44 per cent year on year to $420 million.

'The group has managed to stay profitable despite the . . . economic downturn through effective cost management, strong market positions in resilient businesses . . . and progressive recognition of earnings from pre-sold properties,' F&N said in a statement to the Singapore Exchange yesterday.

It also highlighted that strong property sales in the current year would allow the group to recognise development earnings in the next 12 months.

'The group will further consolidate our position by launching another two projects - Residences Botanique at Sirat Road and the yet-to-be-named development at Flamingo Valley in the next six months, subject to market conditions,' said Lim Ee Seng, CEO of properties.

Meanwhile, F&N's unit Asia Pacific Breweries (APB) reported a 39 per cent increase in net profit to $51.9 million for the third quarter ended June 30, on the back of an exceptional gain of $11.1 million which stemmed from compensation for a terminated business development project.

Excluding the exceptional item, net profit dipped 4 per cent to $40.8 million, from $42.5 million in the previous corresponding quarter.

Organic growth was subdued by challenging market conditions in New Zealand, especially due to the impact of unrealised loss from the revaluation of mark-to-market forward contracts as a result of the weaker greenback versus the New Zealand dollar, APB said.

Group revenue inched 2 per cent to $480.9 million while earnings per share (after exceptional items) for the quarter came in at 20.1 cents, up from 14.5 cents.

'With uncertainty in the global economy impacting the markets in which we operate, the group expects trading conditions to remain challenging, particularly in New Zealand,' APB CEO Roland Pirmez said, adding that the APB will continue to optimise its brand portfolio to compete effectively as well as tighten its control on operating costs.