Conglomerate Fraser and Neave (F&N) has reported an 18% fall in its net profits in the first quarter, resulting to $89 million, primarily due to several losses incurred in its property business. However, its operations on foods and beverages, including numerous high-profile soft drinks, have done well in the last quarter of 31 December. Overall, F&N’s total revenue fall 6% to $1.24 billion.
F&N said key property losses involved an $11.7 million worth of allowance for predictable losses in overseas property development project, as well as a $19.5 million loss for its share in Frasers Commercial Trust.
The company also engrossed a share of $7.5 million property revaluation losses incurred by their associated business in Britain.
Though profits coming from the property business suddenly went down to $25.9 million from $44.39 million, this is still the major profit contributor of the group.
Property development revenue fell 30% to $220.5 million, mainly attributable to a decrease in contributions from Britain and China.
F&N said it has assumed a careful stance to maintain capital by launching selective projects. The group’s most recently launched Caspian was considerably received. Frasers Centrepoint Homes managed to sell 350 flats in a 712-unit condominium and will be launching 200 additional new units for vend today at around $600 per square foot on average.
F&N’s soft drink business reported a 19% increase in pre-tax profits “on improved efficiency and higher volume”. The group’s investment property business has posted $7.2 million loss, compared with $19.8 million gain last year.
The group’s breweries business is considered to as the number two profit contributor, with $19.68 million earnings, higher from $18.3 million. Its $378 million revenue contribution is the biggest of all the group’s businesses.
Dairy business revenue fell 8% to $234 million caused by a decrease in the export volume and arid sales in Thailand.
As of 31 December, F&N has secured $1 billion for financing of loans worth $1.7 billion due in the following 12 months.
F&N unit Asia Pacific Breweries (APB) has reported a 13.4% increase in net profits resulting to $48.3 million for its Q1 ended in 31 December. Revenue increase 2.2% to $580.2 million.
Chief Executive Roland Pirmez said, “APB is heartened to post first quarter gains amid a very demanding economic climate”. It will continue to review investment plans considering the recent environment and selectively invest to sustain future development and improve its competitiveness. Its operating environment remains challenging for the following 12 months, APB has added.
F&N generated earnings per share of 6.4 cents from 7.8 cents last year. The value of the net asset per share was down to $3.76 as of 31 December from $3.80 as of 30 September.
F&N expects its expanded business operations to withstand the major challenges during this tough economic climate.
Yesterday, F&N shares closed 2 cents higher at $2.90.