Fraser and Neave

[winston]

Not vested.

F&N Q3 net profit up 13.6%
By EMILYN YAP

Property and beverage group, Fraser & Neave, on Thursday reported that net profit after exceptionals rose 13.6 per cent to S$110.29 million.

Without the exceptional items, net profit rose 19.8 per cent to S$115.60 million.

Revenue for the quarter fell 7.5 per cent to S$1.2 billion due mainly to development property and printing & publishing. These were partially offset by increases in revenue in the food & beverage, investment property and REIT segments.

[winston]

Not vested. From Kim Eng:-

F&N – 3Q08 results (Gregory YAP 64321450) Previous day closing price: $4.23
Recommendation: Buy (maintained)
Target price: $6.00 (maintained)
Within expectations

Q308 earnings before exceptional items rose 20% Y/Y to $115.6m while 9-month earnings rose 14% to $316.6m, achieving 75% of our full-year forecast. 3Q growth was driven by F&B (dairies & beer) while property contributions stayed relatively weak (overall flat YoY with development profits lower by 8%, the second quarter of Y/Y weakness).

Dairies and breweries outperformed
Dairy profits jumped 35% Y/Y on lower material costs, higher volume and price adjustments. Brewing profits rose 24% as higher volume, better product mix, price increases and lower overheads in Indochina and PNG overcame start-up gestation and currency translation losses. While soft drinks was flat YoY, profits fell 45% QoQ following Q2 seasonal strength.

Property holding its own despite lower development recognition
Development profits are generally lower so far as F&N had more projects completed last year while most projects this year are still under construction. We anticipate higher profits next year as three projects in Singapore are expected to attain TOP. However, higher investment property and REIT income, soon to be augmented by the acquisition of Allco REIT, should still underpin the property segment this year.

Gearing edged up
Cash fell below $900m from $1.3bn a year ago on higher capex, likely to be for breweries and investment properties. Less progress payments were also received relative to expenses on properties under construction. As a result, net gearing edged up to 0.88x from 0.71x in H108. However, we are still comfortable with F&N’s balance sheet.

Still a BUY
Questions remain about which is the most efficient organisational structure for F&N. But with the search for a single CEO over, in favour of a triumvirate structure, F&N can now focus on building up the F&B business to a more substantial size as well as continue its restructuring of its currently asset-heavy property business. We remain buyers of F&N in view of the current weakness in the share price.

[winston]

Not vested. From DBS:-

Story: 3QFY08 revenue slipped 7.5% y-o-y to S$1.2bn, but net profit grew13.6% to S$110.3m. Consequently, 9MFY08 profit grew 12.4% to S$315.5m on the back of 4.7% revenue growth to S$3.7bn.

Point: All divisions, except Development Properties and Printing & Publishing (P&P), registered revenue growth. For 9MFY08, F&B accounted for c.58% and 37% of Group revenue and PBIT, respectively, up from 51% and 34% last year. Its property division remained the main PBIT contributor at 57% of group PBIT, helped by investment properties, REIT and progressive
recognition of sold-out projects.

While sales of its physical properties were slower this year in line with the overall market, we still expect the Group to see progressive contribution from previously sold projects (One St. Michael’s, St Thomas Suites, ClementiWoods, One Jervois, Soleil@Sinaran). We expect these projects to contribute S$1.1bn revenue in FY09F and FY10F.

Relevance: With the acquisition of 17.7% stake in Allco REIT and 100% of the REIT manager, the Group now has an immediate opportunity to manage S$2bn of investment properties. More
importantly, the Group will inject its three assets – Alexandra Point, Alexandra Technopark and Valley Point – into this vehicle. The said assets are worth S$700m and have NLA of 1.4m sq ft. We view this as a win-win situation for FNN and Allco REIT.

We lowered FY09F profit by 10% after imputing slower launches for its development properties amid the cautious market, and excluding Tampines Court from our assumptions since the enbloc sale was not approved by the Strata Title Board before the sales agreement deadline. We remain positive about the long-term prospects for the Group, supported by its strong fundamentals and presence in the non-cyclical F&B and cyclical property market.

Our RNAV is reduced to S$6.14 after taking into account lower market values for its listed subsidiaries and the exclusion of Tampines Court. Consequently, our target price is reduced to S$5.44 (based on 10% discount to RNAV). Maintain Buy.

[ehchang]

i have a question to ask :

F&N has a company called f&n coca cola for the beverage section. do they have a agreement with coca cola on the market segment ? that mean f&n coca cola can only market in singapore, malaysia, and maybe some other countries only. if there is such an agreement, then growth will be limited in this sector, right ?

[ehchang]

sorry, i made a mistake.
f&n already sold f&n coca cola shares to cocacola singapore some years ago. therefore i think they are free.

maybe i should buy some f&n to make me pay more attention to this counter.

[winston]

F&N's FY08 net profit plus exceptionals up 15%
By ANGELA TAN

Fraser and Neave Limited said on Friday net profit for the fiscal year ended September 30, 2008 rose 15 per cent to S$435.83 million.

This included the fair value gain of investment properties and exceptional items.

If these are excluded, the net profit would have been maintained at the same level as the previous year of $379 million and basic earnings per share (before fair value gain on investment properties) was 27.3 cents, a 5 per cent decline over last year largely due to the increase in share capital in the previous year.

Revenue was up 4.7 per cent at S$4.95 billion due mainly to increases in the Food & Beverage, Investment Property and Reit segments but was partially offset by decrease in Development Property and Printing & Publishing segments.

It declared an 8.5 cents 1-tier tax-exempt dividend payout, unchanged from a year ago.

[millionairemind]

Home > Breaking News > Singapore > Story
Nov 14, 2008
F&N shelves 2 projects
By Jessica Cheam

IN LIGHT of weak market sentiments, property and beverage group Frasers and Neave have decided to shelve the launch of two private projects - Lakeside Drive and Sirat Road.

The homes were originally planned for a December launch, but now will be delayed, said the company at its full-year results briefing on Friday.

Profit from local properties grew 19 per cent largely from earlier sales this year for projects such as One Jervois, One St. Michael's and Soleil@Sinaran.

During the year, the group sold 313 units of the 986 launched units.

As a group, F&N posted net profit of $436 million, up 15 per cent from last year. Profit after tax hit a record for $568 million.

[millionairemind]

Published January 17, 2009

F&N hires four banks for $300m refinancing loan
(Hong Kong)

FRASER & Neave Ltd (F&N), Singapore's biggest beverage maker, hired four banks to help it borrow $300 million to refinance maturing debt and boost working capital, three people involved in the matter said.

Bank of Tokyo-Mitsubishi UFJ Ltd, Calyon, Malayan Banking Bhd and Natixis are arranging the three-year loan, which pays interest of 1.45 percentage points above the Singapore dollar swap rate, said the people, who declined to be identified because the information isn't public. Fraser & Neave's corporate communications department hasn't replied to an e-mail from Bloomberg News seeking comment.

Fraser & Neave, which owns part of the Tiger beer brewer, last month said it had to abandon plans to sell its Times Publishing unit because of 'the difficulty potential purchasers encountered in securing funding'. The print unit will instead be retained amid a drive to improve its performance, it said.

The company's $300 million 3.4 per cent bonds maturing in 2012 yesterday traded at a 3.7 per cent yield, or 251 basis points above Singapore government debt, according to Oversea-Chinese Banking Corp prices. A basis point is 0.01 percentage point. -- Bloomberg

[ucypmas]

My initial impression of this company was not very good because of 1) strange management arrangement 2) the management itself (LHY) and 3) massive borrowings. Interested investors should go through their numbers carefully.

[millionairemind]

Published February 14, 2009

F&N Q1 net profit tumbles 18% to $89m
One bright spot is the encouraging response to the company's latest property launch

By EMILYN YAP
LOCAL conglomerate Fraser and Neave (F&N) yesterday posted weaker results for the first quarter ended Dec 31, 2008 as its property segment bore the brunt of an earnings decline.

The group's Q1 net profit attributable to shareholders was $88.98 million, down 18 per cent from the same period last year, after including $29.2 million in fair value gain on investment properties and $7.7 million in exceptional gain (mainly from negative goodwill arising from the acquisition of an associate).

Excluding these items, net profit would have fallen by almost 50 per cent to $52.06 million. The group's share of losses of associated firms totalled $28 million for the period, against a share of profits of $2.4 million a year ago.

Group revenue also weakened by 6 per cent year-on-year to $1.24 billion in Q1.

F&N's property arm was hit by several factors, including a $12 million allowance for foreseeable losses on an overseas property development project, fair value losses on financial assets and unrealised exchange losses on foreign currency loans in associated companies.

Profit before interest and taxation (PBIT) for investment property and development property activities totalled $57.82 million in Q1 - 44 per cent lower than a year ago.

This has led the group to adopt 'a cautious stance to preserve capital, by selectively launching projects, with the goal to achieve an optimal long term return commensurate with risks within the global markets', according to a press release.

One bright spot is the encouraging response to F&N's latest property launch. Some 350 units at Caspian were sold, and the take-up rate has boosted the group's confidence in the mass-market residential segment.

F&N's food and beverage arm 'continued to show remarkable resilience in these uncertain times', said the group. The segment's PBIT rose 9 per cent from a year ago to $83.6 million in Q1.

However, performance within the segment varied. While the soft drinks, breweries and glass containers businesses did better, the dairies business was affected by losses from an associated company. PBIT from the printing and publishing arm weakened by 8 per cent to $14.1 million in Q1.

As of Dec 31, F&N had $1.69 billion of borrowings repayable within a year and it said it has secured financing of $1 billion. 'We are well able to service our debt,' it reassured.