KUALA LUMPUR (July 31): Fraser & Neave Holdings Bhd's (KL:F&N) net profit for the third quarter rose 10.3%, supported by stronger performance from its Malaysian business, coupled with lower tax and operating expenses, despite weaker revenue.

Tax expenses declined by 15.5% to RM38.26 million in 3QFY2026, from RM45.26 million a year ago, while operating expenses fell 4.3% to RM229.96 million from RM240.19 million.

On its outlook, F&N said it may resort to price hikes for its products given the cost pressures.

“Any price adjustments, where necessary, will be implemented gradually and only as a last resort, after taking into account prevailing market conditions and household affordability,” it noted.

The group expects cost pressures to remain manageable through disciplined trade spend management, supply chain optimisation and cost-to-serve efficiencies.

Net profit for the three months ended June 30, 2026 (3QFY2026) increased to RM93.58 million, from RM84.82 million a year earlier.

Quarterly revenue declined 3.8% to RM1.2 billion from RM1.25 billion, dragged by weaker performance of its F&B IndoChina, where revenue declined 18.4% amid softer market conditions and prolonged border closures.

This was partly offset by an 8.4% increase in F&B Malaysia revenue, driven by stronger channel execution, higher export sales and sustained momentum across its beverage and dairy categories, supported by effective marketing campaigns.

The group did not declare any dividend for the quarter under review.

For the first nine months of FY2026 (9MFY2026), its net profit fell 23.37% year-on-year to RM302.05 million from RM394.17 million, as revenue declined 5.9% to RM3.73 billion from RM3.97 billion.

The weaker performance for 9MFY2026 was also due to a forex loss of RM3.8 million against a forex gain of RM8.7 million a year ago, higher operating costs at its integrated dairy farm operations, lower finance income and a higher effective tax rate.

The higher tax rate was mainly due to deferred tax assets not recognised in respect of dairy farm losses and higher withholding tax on dividends received from its Thailand subsidiary.

“Excluding dairy farm losses, the impact of border closures on F&B Indochina's operations, non operating items and unfavourable foreign exchange movements, the group's operating profit improved by 4.3%, reflecting the resilience of its core business,” it noted.

On its prospects, the group said it will continue to prioritise driving sales through wider outlet reach, improved route-to-market execution and accelerating the penetration and reach of Magnolia 100% Fresh Milk across key channels.

The group also expects the commercialisation of its new Cambodia dairy plant by the end of the fourth quarter of FY2026.

F&N's share price has fallen by over 20% since the start of this year. The stock closed down 10 sen or 0.36% at RM27.90, giving the group a market capitalisation of RM10.23 billion.