KUALA LUMPUR (Nov 6): Fraser & Neave Holdings Bhd (KL:F&N) is considering further price increases for selected products as rising commodity costs continue to put pressure on the food and beverage manufacturer's margins.
The group has already implemented price increases averaging about 3% to 4% across its overall product portfolio in recent quarters, although the adjustments varied across products and markets.
F&N chief executive officer Tarang Gupta said further increases remain a possibility, given the rising costs of raw materials such as dairy, sugar and tin, as well as energy.
"Is a price increase out of the window? No. Because the commodity prices, I think if you just Google them from dairy raw materials to sugar to tin to energy, they are all upward trending," he said at the group's financial results briefing on Friday.
However, Gupta stressed that any additional adjustments would be targeted rather than across the board, as the company seeks to balance higher costs against consumers' willingness to pay.
"It's not a blanket price increase; we will have to be very, very targeted depending on price elasticity," he said.
The group is also looking at operational efficiencies, product pricing strategies and cost-saving measures to protect its margins without compromising sales volumes.
Chief financial officer Tiong Yean Yau added that improving cost efficiency would remain the group's priority before resorting to price adjustments.
"Cost efficiency is always the priority that we are looking at before we actually move to the price of this. That's always our direction," said Tiong.
The potential price adjustments come as F&N reported a 14% decline in net profit to RM437.09 million for the financial year ended Sept 30, 2026 (FY2026), from RM508.47 million a year earlier.
Full-year revenue fell 5.3% to RM4.92 billion from RM5.20 billion, mainly due to higher costs associated with new investments, continued sales disruptions in Cambodia and unfavourable currency movements.
For the fourth quarter, however, net profit rose 18.2% to RM135.05 million from RM114.29 million a year earlier, mainly due to lower tax expenses, despite revenue slipping 3.1% to RM1.19 billion.
Gupta said commodity costs had already increased in the second half of FY2026, prompting some of the group's earlier pricing adjustments, with further cost pressures expected in FY2027.