Food Empire Holdings (F03) H1 2024 earnings summary

Executive summary

• H1 2024 revenue rose 13.6% YoY to US$225.2m, led by South-East Asia, South Asia and Ukraine, Kazakhstan and CIS.

• Profit for the period fell 12.8% to US$23.2m, mainly due to Russia price disruption and higher operating expenses.

Financial highlights

• Gross profit declined 2.7% YoY to US$67.6m as cost of sales rose 22.4%; operating income fell 17.6% to US$28.5m and profit before tax declined 13.8% to US$29.2m.

• EBITDA fell 11.7% to US$36.4m; net profit attributable to shareholders decreased 11.3% to US$23.6m, while total profit for the period was US$23.2m.

• Selling and marketing expenses rose 10.4% to US$17.4m; general and administrative expenses increased 13.4% to US$21.8m, reflecting higher manpower costs and inventory obsolescence provision.

• Higher ingredient prices and brand-building expenses weighed on results; stronger profit contribution from other segments partly offset lower Russia contribution.

Outlook and guidance

• Cautiously optimistic outlook, with sales performance expected to be maintained; ongoing reviews and strategy adjustments aim to mitigate rising raw-material costs.

• South-East Asia and South Asia are expected to sustain strong growth, supported by capacity expansion and emerging-market demand.

• Malaysia non-dairy creamer capacity expansion was completed in April 2024, increasing capacity by up to 100%; full utilisation is expected over 24–36 months.

• A second Malaysia snack factory is expected to operate in H1 2025; the Kazakhstan coffee-mix facility is expected to be completed by end-2025.