KUALA LUMPUR: Fraser & Neave Holdings Bhd (F&N) is unlikely to translate lower raw and packaging material prices as a result of depreciation in local currencies into gains. With prices of raw materials such as palm oil, skimmed milk powder and whey powder nearly halved in the last six months, relief could be around the corner for the company. However, in a scenario of falling consumption and falling exchange rate, any benefit would likely be offset partially or fully by potential savings, F&N said in its 2008 annual report. In the foreign exchange market, the ringgit appreciated against the dollar on expectation that the Obama administration's economic stimulus plan would be approved. The ringgit firmed up 1.1% to RM3.5870 per US dollar yesterday from 3.6237 on Jan 23, according to data compiled by Bloomberg . The currency lost 4.2% in 2008. "While there is much uncertainty on how we will be impacted in Malaysia and Thailand, dampened consumption is very much certain. (However) barring any significant slump in consumption, we are cautiously optimistic for the year ahead and will institute various measures to minimise the impact on our operating environment," chairman Syed Badarudin Jamalullail said in the report. For its financial year ended Sept 30, 2008 (FY08), the group's revenue jumped 25% to RM3.59 billion from RM2.9 billion previously, driven by growth in its food and beverage division (F&B). Its operating profit rose 13% to RM256.7 million as operating profits of the F&B division - soft drinks, dairies and glass businesses - improved by 22% to RM246.9 million compared with RM202.9 million the previous year. F&N's expansion to Thailand via the acquisition of Nestlé's liquid milk units in 2006 also contributed to its strong financial performance, as the consolidation of the Nestlé business buoyed its dairies division's overall revenue and operating profit by 39% and 47%, respectively. On its dairy business, construction plans of its dairy factory in Rojana, Thailand, were under way. Upon completion in 2009, F&N said the Thai plant would provide a strong platform to sustain future earnings growth. It also planned to relocate its main dairy production facility in Petaling Jaya to a 15.1-hectare site in Pulau Indah, which it purchased for RM27.7 million in 2007. Apart from its F&B businesses, F&N also owns and develops properties in Malaysia, Thailand, Vietnam and China. While the contributions from its property division make up a small fraction of the group's operating profit, it is building a strong recognition for concepts it introduced to its development projects. According to the annual report, contribution from its property division amounted to 3% of group operating profit of RM256.7 million, compared with 11% in 2007 as rising inflation during the period, coupled with escalating labour and material costs affected the division. As a sign of a tougher outlook in the property sector, F&N announced last November that the independent third party purchaser for its development site known as Ampang Hilir 233 near the KL City Centre (KLCC) decided not to proceed with the deal. The RM55.8 million deal was signed in June last year. Still, the property business would be supported by its RM350 million integrated commercial development, Fraser Business Park, located at the previous F&N factory premises. F&N also owns vacant land in Shah Alam, Klang, Kota Kinabalu and Kuching with a total net book value of RM49.95 million as at Sept 30 last year. "The property division will focus on completing phase II of Fraser Business Park and development planning efforts for its portfolio of development land, including unlocking the value of its existing land bank in Petaling Jaya and Kota Kinabalu," it said.