F&N's net profit down 29% to $8.5m

Blame the fall in beverages revenue.

Food and beverage player Fraser and Neave's net profit ended the quarter at $8.5m, down by 29% YoY on the back of 5.8% YoY drop in revenue.

According to DBS Group Research, the group's beverage revenue dropped 21.5% YoY in 2Q17 to $113.6m due to lower sales in Singapore and Malaysia, mitigated partially by vending business acquired in July 2016, commencement of third party brands, and distribution network expansion in Myanmar.

Meanwhile, the business segment posted a pretax loss of S$5.2m due to weak performances from Malaysia and Singapore, arising
from weaker volumes, higher raw material prices and weaker Malaysian Ringgit.

It was the opposite for the group's dairies segment, as it posted 41.7% YoY growth in profit before interest and tax to $39.8m due to lower commodity costs.

Dairies’ revenue increased by 2.4% to $271.6m, aided by domestic sales in Singapore (chilled products, yoghurt), Myanmar (Teapot brand), and Thailand (Teapot, Carnation brands). However, this was offset partially by 11.9% drop in revenue in Malaysia due to weaker consumer sentiment and competition.

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