KUALA LUMPUR (Nov 5): Fraser & Neave Holdings Bhd's (KL:F&N) net profit for the fourth quarter ended Sept 30, 2024 (4QFY2024) dropped 38.21% year-on-year to RM84.99 million from RM137.56 million, impacted by higher tax expenses and increased withholding taxes on dividends repatriated from its Thailand operations.

The higher tax expense followed the expiration of a Board of Investment incentive for F&N’s Thailand food and beverage (F&B) division in 3QFY2024, F&N's bourse filing on Tuesday showed.

This resulted in earnings per share dropping to 23.2 sen in 4QFY2024, down from 37.5 sen in the same quarter last year.

Quarterly revenue was 1.61% higher at RM1.26 billion from RM1.24 billion, driven by higher domestic sales in both its F&B Malaysia and F&B Thailand segments, despite external challenges like geopolitical tensions affecting global trade and logistics, as well as unfavourable THB/MYR currency translation.

F&N declared a final dividend of 33 sen per share. In contrast, it made a 50 sen payout for 4QFY2023, which comprised a 33 sen final dividend and a special dividend of 17 sen.

For the full FY2024, F&N reported a slight 1.09% increase in net profit to RM542.77 million from RM536.9 million the prior year, as revenue rose 5% to RM5.25 billion from RM5 billion.

F&N attributed this growth to higher domestic sales and exports to Cambodia, with beverages, water, and dairy products as key drivers, despite geopolitical tensions and rising freight costs affecting exports.

Looking ahead, F&N said it remains focused on optimising its existing businesses while advancing growth initiatives in agriculture through its F&N AgriValley project.

F&N is also exploring options to resolve a recent setback in livestock arrivals for its integrated dairy farm in Gemas, which is “progressing on schedule". Delivery of a batch of livestock from the US, initially scheduled to depart from Washington port on Oct 29, 2024, had been cancelled following a suspension letter from Malaysia’s Department of Veterinary Services on Oct 24, 2024, due to concerns over an avian flu (HPAI H5N1) outbreak.

F&N added that its dairy manufacturing plant development in Cambodia is also on track. "Other new capital expenditures include [a] new carbonated beverages and drinking water line in Butterworth, a new sterilised milk filling and packing line in Pulau Indah, as well as a new chocolate manufacturing line in Rawang,” F&N added.

Shares in F&N rose eight sen or 0.26% to close at RM30.98 on Tuesday, valuing the company at RM11.36 billion. Year-to-date, shares in the company have appreciated over 10%.