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9 Key Takeaways From QAF Limited’s Latest Earnings Update

Two weeks ago, QAF Limited (SGX: Q01) released its 2018 second-quarter earnings update.

As a quick introduction, QAF is a food production company. It is involved in bakery operations, pork production, food processing and distribution, feed milling, food trading and distribution, food manufacturing, and wine distribution. Some of the more prominent brands the company has in its portfolio are Gardenia, Cowhead and Farmland.

Here, let’s look at nine things that investors should know from QAF’s latest earnings update:

1. Sales for the quarter declined 2% year-on-year to S$199.3 million.

2. Operating profit plunged 93% year-on-year to S$0.9 million.

3. Similarly, net profit plummeted 86% year-on-year to S$1.2 million.

4. Consequently, earnings per share came down 87% year-on-year to 0.2 cents.

5. In the latest quarter, net margin fell from 4.0% to 0.6%.

6. QAF generated net cash from operating activities of S$10.7 million for the reporting quarter, down from S$ 21.2 million last year. This was due to lower profitability for the quarter.

7. QAF had S$102 million in borrowings as at 30 June 2018, up from S$113 million as at 31 December 2017. Cash and cash equivalents stood at S$74 million as at 30 June 2018, down from S$136 million as at 31 December 2017.

8. The company proposed an interim dividend of 1 cent per share .

9. QAF provided the following outlook:

“As compared to 1H 2018 and barring unforeseen circumstances, the Primary Production segment is expected to report a weaker financial performance in the second half, whilst the Bakery and the Distribution & Warehousing segments are expected to perform better in the second half.”

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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 Lawrence Nga doesn’t own shares in any companies mentioned.