Food Empire reports 50.9% earnings growth of US$13.8 mil for 1QFY2023

1QFY2023 revenue increased by 24.2% y-o-y to US$102.6 million.

Food Empire Holdings F03 has reported earnings of US$13.8 million ($18.4 million) for the 1QFY2023 ended March 31, 50.9% higher y-o-y.

The higher earnings came on the back of a 24.2% y-o-y growth in revenue of US$102.6 million.

During the quarter, the company’s revenue grew across all of its markets except Southeast Asia and “other segments” as sales were lower in the same quarter the year before when geopolitical conflict broke out during the period.

“Our core segments continued to invest in our brands resulting in higher revenue for 1QFY2023,” says the company in its results release.

In Southeast Asia, revenue fell due to the post-Covid-19 normalisation in the group’s Vietnam market. Its non-dairy creamer factory in Malaysia saw lower output due to a one-off supply chain issue.

Gross profit rose by 43.2% y-o-y to US$36.6 million in the 1QFY2023.

Ebitda rose 62.7% y-o-y to US$21.7 million.

Net profit before tax rose by 67.9% y-o-y to US$18.0 million.

As at March 31, cash and cash equivalents stood at US$123.3 million.

Looking ahead, the company says it has been performing well in its core markets, Russia, Ukraine, Kazakhstan and Commonwealth of Independent States (CIS). However, as the geopolitical situation remains uncertain, there may be volatility in the foreign exchange rates and economic situation.

It adds that it will continue to monitor the economic and political developments closely and implement strategies to deal with the effects of these developments.

In Southeast Asia, Food Empire says it will be increasing its advertising and promotional activities in Vietnam to achieve higher revenue. In the region, demand for its potato chips products remains strong with continued interest from private label customers. In addition, the expansion of its non-dairy creamer factory is ongoing. The added capacity is expected to commence commercial production in 4QFY2023.

In South Asia, the company’s spray dry and freeze dry coffee plants have been “operating at optimal capacity to meet international demand that remains robust”.

“As demand continues to exceed supply, the group expects to benefit from favourable pricing for our freeze dry products going forward,” reads the statement.

Shares in Food Empire closed 5 cents higher or 5.05% up at $1.04 on May 11.

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