Conglomerate Fraser and Neave (F&N) on Friday said it is looking to expand its food and beverage business in a bid to rebalance profit contributions from its other businesses.
The property business is driving growth for F&N. Commercial properties led the way, thanks mainly to higher management fee income, and strong occupancy and rental rates.
Hui Choon Kit, General Manager, Treasury and Budget, Fraser and Neave, said: “Not only is the commercial property business doing very well, but from the presales of projects, we will continue to be able to deliver good earnings.
“So now the property earnings are very strong; 55 percent of PBIT (profit before income tax) comes from property.”
Anthony Cheong, Group Company Secretary, Fraser and Neave, said: “This has been the result in property profits over the last few years, which has outstripped the performance of all our other business groups.
“Without wanting to hold back on property, we still see the need to rebalance the profit contributions from… the various core businesses, and one way of achieving a great leap must be through M&A.”
The food and beverage business is one segment that F&N intends to expand.
Mr Cheong said: “As you know, I think we’ve received S$900 million from Temasek about a year ago, principally for the development of the F&B business, and you can expect that there is quite a lot of focus in that area.”
F&N said that the current market presents excellent opportunities to make investments at more reasonable values. It is proposing to pay an interim dividend of 5 cents a share.
Meanwhile, the aftermath of Cyclone Nargis affected F&N’s operations in the outskirts of Yangon.
Mr Cheong said: “The brewery building was damaged slightly and one sales office in Yangon was wiped out, but none of our employees have been injured, although a few have lost their homes.
“Because electricity and communication lines are down, we have great difficulty trying to get an update of the situation. But I think, one can expect that not very much beer will be drunk in the coming months. I think sales will be affected – we expect that.
“But the principal concern of course is recovery efforts and… to try and alleviate the plight of all those affected. I think the brewery is trying to do that as well by supplying water trucks to nearby villages.” – CNA/ms
Source : Channel NewsAsia – 9 May 2008