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

Fraser and Neave Limited (SGX: F99) reported its full-quarter earnings for the financial year ending 30 September 2015 (FY2015) this last Friday. 

Fraser and Neave, which is better known as F&N, organizes its business segment into three main buckets: beverages, dairies, and printing & publishing. To learn more about the company, click here, here and here. You can catch up with the prior quarter’s earnings here.  

Financial highlights

The following’s a quick take on F&N’s latest financial figures:

  1. For FY2015, F&N’s revenue rose by 0.5% year on year to S$2.1 billion.
  2. Net profit attributable to shareholder soared by 368% year on year to S$632.6 million. Net profit from continuing operations, though, fell to S$63 million for the full fiscal year. This compares with the net profit from continuing operations of S$85.7 million recorded a year ago.  
  3. F&N’s earnings per share (EPS) also rose 365% year on year. EPS for continuing operations, though, fell from S$0.059 per share in FY2014 to S$0.044 per share in FY2015.
  4. FY2015’s cashflow from operations was S$224.8 million while capital expenditure was S$56.1 million. Thus F&N registered positive free cash flow of S$168.7 million. 
  5. As of 30 September 2015, the group had S$961 million in cash and equivalents and S$100.5 million in debt.

In summary, F&N recorded flat revenue for the year and a bottom-line that fell. On a brighter note, the food and beverage purveyor generated positive free cash flow for the year and maintained a strong balance sheet.

The board of directors proposed a final dividend of $0.03 per share. Together with the interim dividend of $0.02 per share, this would make up a total of $0.05 per share for the fiscal year.

Operational Highlights

For FY2015, F&N’s Beverage segment recorded revenue of S$639 million, relatively unchanged from the year before. Unfortunately, the Beverage segment’s earnings before interest and taxes (EBIT) fell 43% year on year to just S$38 million for the year. The segment’s EBIT was affected by poor results out of Malaysia and aggressive investment in new markets.   

The company’s Printing & Publishing segment remained the laggard, recording a 3.2% fall in sales to S$341 million for the fiscal year. The segment also recorded losses in EBIT of S$15 million.

F&N’s Dairies’ segment did better. The Dairies segment registered a 2.2% year on year rise in revenue to S$1.1 billion. The segment’s EBIT was also up a strong 21% to S$69 million.  

During the year, F&N also completed the sale of its 55% stake in Myanmar Brewery Limited to Myanma Economic Holdings Limited. The food and beverage outfit realised a net divestment gain of $542 million for the sale.

Foolish summary

At its closing price last Friday of $2.17, F&N traded at 49 times trailing earnings (based on fully diluted earnings from continuing operations) with a trailing dividend yield of around 2.3%.

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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.