KUALA LUMPUR (May 4): Fraser & Neave Holdings Bhd’s (F&N) net profit grew 1.3% to RM103.51 million for its second quarter ended March 31, 2021 (2QFY21), from RM102.17 million a year earlier, on the back of higher sales, favourable product mix, as well as prudent control on advertising and promotion (A&P) spend.

Quarterly revenue rose 8.6% to RM1.09 billion from RM1.01 billion, its bourse filing today showed. Earnings per share increased to 28.2 sen from 27.9 sen in 2QFY20.

The group declared an interim dividend of 27 sen per share for the financial year ending Sept 30, 2021 (FY21), payable on June 16.

F&N attributed the higher sales to the recovery in the domestic market, double digit growth in exports fuelled by growth in the Middle East and Africa markets, and maiden contribution from the Sri Nona Companies.

This was despite subdued Chinese New Year festivities due to Movement Control Order (MCO 2.0) restrictions in Malaysia, as there was positive momentum in on-premise demand after the easing of restrictions in early March.

Additionally, Food & Beverages Thailand (F&B Thailand) also registered 4.3% revenue growth in 2QFY21 at RM525.8 million amid a recovery in domestic economic activities, especially among hawkers, restaurant/café operators and cash-and-carry channels.

“Exports from Thailand also grew from greater demand overseas, which helped mitigate the slower offtake in Indochina markets due to stronger Thai Baht (which led to higher price in trade) and escalating Covid-19 cases in the region,” said F&N.

On a quarter-on-quarter basis, however, net profit declined by 24.3% from RM136.81 million, despite a marginal 0.8% revenue growth from RM1.08 billion. F&N blamed the lower profit on lower export margins and higher commodity costs.

For the first six months of FY21, its net profit rose 4.2% to RM240.32 million from RM230.54 million a year ago, while revenue rose 2.8% to RM2.17 billion from RM2.12 billion. Higher earnings for the period were due to investment tax incentives at the Thai subsidiary, said F&N.

On prospects, the group remains cautious of the local and global uncertainties, as the Covid-19 pandemic situation remains fluid and uncertain, said F&N Chief Executive Officer Lim Yew Hoe in a statement.

“Commodity prices are on the uptrend and expected to rise further. Regardless of the situation, we will continue to develop our rich portfolio of brands and expand our geographical presence, while adapting and refining our strategies to constraints imposed by the pandemic,” Lim said.

The company is confident that its long-term strategies are well placed to manage the risk of the current landscape while keeping the company on track to drive future growth, F&N added.

F&N’s shares closed eight sen or 0.27% lower at RM29.92 today, valuing it at RM10.97 billion.