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

Fraser and Neave Limited (SGX: F99) reported its second-quarter earnings for its financial year ending 30 September 2016 (FY2016) yesterday. The reporting period was for 1 January 2016 to 31 March 2016.

Fraser and Neave, or better known as F&N, organizes its businesses into three main segments: Beverages; Dairies; and Printing & Publishing. To learn more about the company, click herehere and here. You can also catch up with the results from F&N’s prior quarter here.

Financial highlights

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

  1. For FY2016’s second-quarter, F&N’s revenue fell by 5% year-on-year to S$474.3 million.
  2. Net profit from continuing operations jumped over 25% to S$26 million for the reporting quarter.
  3. F&N’s earnings per share (EPS) was 0.8 cents, up by a third from the 0.6 cents seen in the same quarter a year ago.
  4. Cash flow from operations was S$16.6 million while capital expenditure was S$9.8 million. F&N thus registered positive free cash flow of S$6.8 million. This is a big decline from the S$21.3 million seen in the same period a year ago (S$42.2 million in cash flow from operations and S$20.9 million in capex).
  5. As of 31 March 2016, F&N had over S$960 million in cash and equivalents and S$144.4 million in debt.

For the quarter, F&N recorded slightly lower revenue. But its profit, including discontinued operations, fell by nearly 50%. The sale of its Myanmar brewery stake was the main reason. Fortunately, profit from continuing operations was healthy, increasing over 25%. The food and beverage outfit also generated positive free cash flow and maintained a strong balance sheet.

An interim dividend of 1.5 cents per share was declared, down from the 2 cents per share declared last year.

Operational highlights

F&N’s Beverage segment recorded revenue of S$144.6 million for the fiscal second-quarter, a 2.6% increase compared to the year before. The segment’s profit before interest and taxes (PBIT) also rose by 1.4% year-on-year to S$9.1 million.

For the same period, F&N’s Dairies’ segment saw its top-line fall 5.5% when compared to the same quarter a year ago. The segment’s revenue came in at S$260 million while its PBIT actually soared by 41% to S$29 million.

F&N’s Printing & Publishing segment experienced a near-16% fall in sales, ending the quarter with S$69.1 million in revenue. The segment also recorded a steeper loss of $6.5 million in PBIT.

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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.