Property behind 14% rise in F&N Q3 profit

August 8, 2008
Property behind 14% rise in F&N Q3 profit
APB Q3 net profit after exceptionals jumps 22% to $37.4 million
By EMILYN YAP

DEVELOPMENT property was the key bottom line driver for Fraser &
Neave (F&N), which yesterday reported a 14 per cent rise in net
profit after exceptionals to $110.3 million for its third quarter
ended June 30, 2008.

This translates to earnings per share of 7.9 cents, against 7 cents a
year ago. Without the exceptional items, net profit increased 20 per
cent to $115.6 million.

Revenue fell 8 per cent from Q307 to $1.2 billion. The food &
beverage (F&B) business was the largest contributor to revenue, at
more than 60 per cent.

'Properties benefited from healthy margins from previously launched
residential projects, as well as higher rental and occupancy rates,'
said F&N chairman Lee Hsien Yang.

Property development contributed 60 per cent of the group's net
profit before exceptionals.

Besides properties and F&B, F&N has a printing & publishing (P&P)
arm. 'Our diversified businesses and wide footprint have helped
shield F&N from the direct impact of the credit and liquidity
crisis,' Mr Lee said.

F&N announced a management revamp in June. As part of the change, the
current CEO of Asia-Pacific Breweries (APB), Koh Poh Tiong, will
become CEO of F&N's F&B business on Oct 1. The CEOs of properties,
F&B and P&P will report to F&N's board.

'This new management structure will give F&N sharper strategic and
operational focus, while preserving its unique multi-sector,
diversified status,' Mr Lee said yesterday.

For the nine months ended June 30, F&N's net profit after
exceptionals rose 12 per cent year on year to $315.5 million. Revenue
was 5 per cent higher at $3.7 billion.

'Economic growth in the Asia-Pacific region is expected to be
moderate for the next 12 months,' F&N said in its financial
statement. It expects its net profit before exceptionals this year to
exceed last year's.

F&N shares closed 11 cents lower at $4.23 yesterday. The counter was
$5.80 at the start of the year.

F&N's unit APB also reported notable results for the third quarter,
with net profit after exceptionals jumping 22 per cent to $37.4
million from a year earlier. Based on this, earnings per share were
14.5 cents in Q3, 2.6 cents higher than a year earlier.

Excluding exceptionals, net profit was $42.5 million, or 34 per cent
higher.

APB posted a 9.6 per cent increase in revenue to $472.9 million.
Vietnam, Cambodia and Laos together generated 37 per cent of revenue.

For the nine months ended June 30, APB's net profit after
exceptionals rose 13 per cent to $123.7 million from a year earlier.
Revenue was 12.6 per cent higher at $1.5 billion.

'Very satisfactory results were achieved for the third quarter and
nine-month period to June 30,' said Mr Koh. 'This positive trend is
likely to flow into the remaining fourth quarter. Barring any
unforeseen developments, we expect our full-year attributable profit
(before exceptional items) to exceed that of last year.'