Fraser and Neave Limited’s Latest Earnings: What Investors Should Know   

Fraser and Neave Limited (SGX: F99) – or better known as F&N – reported its fiscal second-quarter earnings yesterday evening. The reporting period was for 1 January 2015 to 31 March 2015.

F&N’s revenue comes from its four major business segments: Beverages, Dairies, Printing & Publishing, and Others. You can catch up with the latest developments in the company here.

Financial highlights

Here’s a rundown on the company’s latest set of financial figures:

  1. Overall revenue for F&N was up 3.2% on a year on year comparison, coming in at around $608.3 million.
  2. Consequently, net profit to the firm for the reporting period rose 8.4% to around $51.3 million.
  3. However, earnings per share (EPS) from continuing operations (and after exceptional items), had fallen by 25% from 2.4 cents in the second quarter last year to 1.8 cents in the reporting quarter.
  4. Cashflow from operations came in at $42.2 million for the second quarter of 2015 with capital expenditures clocking in at $20.9 million. This gives F&N a positive free cash flow of $21.3 million for the reporting quarter, up from the figure of $2.5 million seen a year ago.
  5. As of 31 March 2015, the company had $366 million in cash and equivalents and $170 million in borrowings. This gives a net cash position of around $196 million.

In all, revenue and profit was up for F&N on a year on year basis. The company also generated positive free cash flow for the quarter and maintains a net cash position on its balance sheet.

Management also proposed an interim dividend of $0.02 per share for the reporting quarter, unchanged from a year ago.

Operational highlights

Quarterly revenue rose across the board for the business segments in F&N.

Revenue for the Beverages segment grew 4.6% year on year, coming in at $250.6 million. The segment continued to benefit from its stake in Myanmar Brewery which grew sales by 27%. It’s worth noting that F&N would be selling its holdings in Myanmar Brewery to Myanma Economic Holdings Limited (a company tied to Myanmar’s military) at a price that will be set by an independent valuer appointed by both parties.

On the Dairies segment, revenue expanded by 2.3% to $275.2 million with strong sales recorded in Thailand. Meanwhile, the Printing & Publishing segment also eked out at 1.7% revenue gain to end the quarter with $82.1 million in sales.

A quick look ahead

As my colleague Stanley shared previously, F&N’s Malaysia-listed subsidiary, Fraser and Neave Holdings Bhd, has signed agreements with the Nestlé Group to manufacture and distribute consumer food brands such as Carnation, Bear Brand, Bear Brand Gold, Ideal Milk, and Milkmaid in ASEAN nations including Singapore, Thailand, Malaysia and Brunei. The licenses are for a period of 11 years and seven months, with a right to extend for a further 10-year term. The deal will take effect from 1 July 2015.

At its closing price yesterday of $2.78, F&N traded at around 30 times its trailing earnings with a trailing 12 months dividend yield of 1.8%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.