F&N mindful of prospects despite a strong 1H24

PETALING JAYA: Fraser & Neave Holdings Bhd (F&N) is keeping a cautious outlook about its prospects for the second half of its financial year ending Sept 30 (2H24), after a positive six months.

The group said its performance for 1H24 had been primarily down to festive sales.

It added that it will remain vigilant and adaptable to market shifts and wider geopolitical and macroeconomic developments.

Its second quarter ended March 31 (2Q24) saw net profit surge 63.5% year-on-year (y-o-y) to RM165.4mil, on the back of a 12.1% rise in revenue to RM1.35bil.

F&N attributed the stellar growth in net profit to higher sales, supported by improvement in margins from favourable product and country mix, lower input costs, manufacturing-overhead efficiencies, as well as savings in the supply chain.

Providing momentum for the food and beverage (F&B) sector in Thailand and Malaysia, festive sales and a favourable foreign-exchange translation from a stronger Thai baht also aided the increase in sales.

Cumulatively, for the company’s half-year ended March, net earnings improved by 12.1% y-o-y to RM336.1mil, supported by a similar 10.7% growth in turnover to RM2.69bil, which F&N said was driven by effective sales execution during festive seasons and early sell-in for Hari Raya, as well as higher exports.

Compared to the preceding quarter ended Dec 31, 2023, net profit was lower marginally by 3.1% from RM170.7mil, despite revenue also inching higher by 1.5% from RM1.33bil, which the group attributed primarily to the phasing of sell-in for Chinese New Year and Hari Raya.

F&N also declared an interim single-tier dividend of 30 sen per share during the quarter under review for the year ending Sept 30, amounting to approximately RM110mil, to be paid on May 31.

Acknowledging that it has benefited from an overall improvement in commodity prices, the company is nonetheless anticipating challenges with the rising costs of raw materials such as sugar, rice, gelatine and cocoa powder.

However, F&N said it has taken measures to address the said challenges as these aforementioned commodities are vital to its business.