On 9 May 2025, Fraser and Neave Limited (“F&N”) announced their half year result for FY2025. While F&N has been able to significantly increase their revenue, their profits remain relatively unchanged when compared to the same period in the previous financial year. This was due to an increase in distribution and administration expenses and a 21% decline in profit contribution from Vietnam Dairy Products Joint Stock Company, the Group’s associate. Management did not disclose the reason for the increase in their operating expenses. Investors will need to monitor over the next few quarters if this trend continues.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
Website: Financial Statements And Related Announcement::Half Yearly Results
Financial Highlights
Revenue
| Metrics | Current | Previous |
|---|---|---|
| Revenue | +13.2% | +16.3% |
| Rating | Favorable | Favorable |
Revenue for the first half of FY2025 has increased by 13.2% to SGD1,212 million from SGD1,071 million for the same period in the previous financial year. Overall, the revenue metric remains Favorable.
The increase was mainly due to F&B segment growing by 15%, driving the Group topline performance. This was supported by higher beer and soft drinks volumes, mainly from successful Chinese New Year campaigns, introduction of new products and improved pricing. There were also stronger canned milk sales in key markets, higher volumes in Laos and Cambodia, as well as maiden contribution from the Malaysia’s School Milk Programme.
This was offset by P&P’s revenue due to the absence of one-off contributions that had supported the prior year’s performance.
Earnings per share
| Metrics | Current | Previous |
|---|---|---|
| Earnings per share | Unchanged | +20.0% |
| Rating | Neutral | Favorable |
Earnings per share for the first half of FY2025 remains unchanged at SGD0.058 per share. It was noted that there was an increase in operating expenses, which offset by the increase in gross profit of 7.0% and the revenue increase as highlighted earlier. Management has also disclosed that there was a 21% decline in profit contribution from Vietnam Dairy Products Joint Stock Company, the Group’s associate. The metric shifted towards Neutral.
Operating Cash Flows
| Metrics | Current | Previous |
|---|---|---|
| Operating Cash Flows | -8.3% | No Update |
| Rating | Unfavorable | Unfavorable |
Operating cash flows forthe first half of FY2025 has decreased by 8.3% to SGD128 million from SGD140 million for the same period in the previous financial year. The decrease was mainly due to a slower collection of receivables, as well as an increase amount in income taxes paid. The increase in tax can be attributed to an increase in withholding tax expense and a reduction in non-taxable income following the expiry of a tax incentive in Thailand. The metric remains Unfavorable.
Gearing ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing ratio | 34.5% | 34.1% |
| Rating | Favorable | Favorable |
Gearing ratio as of 31 March 2025 has increased to 34.5%. This metric is computed using total assets of SGD5,227 million and total liabilities of SGD1,803 million. Do note management have provided a gearing ratio of 18.8% using borrowings less cash and bank deposits over total equity. The metric remains Favorable as it is still relatively low.
Interest coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest coverage | 7.4x | No Update |
| Rating | Favorable | Favorable |
The interest coverage stands at 7.4 times as of 31 March 2025, using profit before interest and tax of SGD165 million and finance costs of SGD22 million. The metric is Favorable.
Price-to-book ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 0.62 | 0.66 |
| Rating | Favorable | Favorable |
The Price-to-book (“P/B”) ratio for F&N became cheaper at 0.62. This is computed using the Net Asset Value (“NAV”) per share of the Group as of 31 March 2025 of SGD1.99 per share and the closing share price of SGD1.23 as of 19 June 2025. This is Favorable as you will be paying a discount to its book value.
As of 19 June 2025, the Market Capitalization is approximately SGD1,792 million.
Website: Yahoo Finance: Fraser and Neave, Limited (F99.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 4.47% | SGD 0.055 |
| 2024 | 4.47% | SGD 0.055 |
| 2023 | 4.07% | SGD 0.050 |
| 2022 | 4.07% | SGD 0.050 |
| 2021 | 4.07% | SGD 0.050 |
| 2020 | 4.47% | SGD 0.055 |
F&N have been paying relatively consistent dividends over the last few years. With the total dividend payout in the calendar year 2025 of SGD0.055 per share and using the closing share price of SGD1.23 as of 19 June 2025, this translates to a recurring dividend yield of 4.47%. For my benchmark, a general reasonable yield would be around 5.25%. The dividend yield is Unfavorable.
Website: Reasonable Dividend Yield 2025Q2 – 5.25%
If using dividend yield of 5.25% as a benchmark, based on the dividend of SGD0.055 there is potential for F&N to see its share price drop by another 14.8% to SGD1.05. Investors will need to be mentally prepared that the share price may fall further to match market expectations.
| Yield | Share Price | Downside |
|---|---|---|
| Current | 1.23 | – |
| 5.25% | 1.05 | -14.8% |
| 6.25% | 0.88 | -28.5% |
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Revenue | +13.2% | Favorable |
| Earnings per share | Unchanged | Neutral |
| Operating Cash Flows | -8.3% | Unfavorable |
| Gearing ratio | 34.5% | Favorable |
| Interest coverage | 7.4x | Favorable |
| Price to Book Ratio | 0.62 | Favorable |
| Overall | Favorable |
Overall, it remains Favorable to invest in F&N. The half year earnings per share has sufficiently covered their annual dividend payout. If there are no significant changes over the next few quarters, F&N will be able to generate more profits and cashflows to enhance their operations.
Background
Fraser and Neave, Limited (“F&N” or the “Group”) had its origins more than a century ago, in the spirited decisions of two enterprising young men, John Fraser and David Neave, who diversified from their printing business to pioneer the aerated water business in Southeast Asia in 1883. From a soft drinks base, F&N ventured into the businesses of beer in 1931, dairy in 1959, property development and management in 1990, and publishing & printing in 2000. In 2012, the Group divested a substantial part of its beer business. In 2013, as F&N celebrated its 130th year of operation, it also welcomed its new majority shareholder, the TCC Group, which is engaged in food and beverage, real estate, industrial trading and consumer products, insurance and agriculture. In January 2014, through a distribution in specie and re-listing of Frasers Property Limited by way of introduction on the Singapore stock exchange, the Group demerged its Properties business.
Today, F&N is a leading Southeast Asian consumer group with expertise and prominent standing in the Food & Beverage and Publishing & Printing industries. Leveraging its strengths in marketing and distribution, research and development, brands and financial management, as well as years of acquisition experience, the Group provides key resources and sets strategic directions for its subsidiary companies across both industries.
Listed on the Singapore Stock Exchange, F&N ranks as one of the most established and successful companies in the region with an impressive array of renowned brands that enjoy strong market leadership. F&N is present in 11 countries spanning Asia Pacific and the Americas, and employs over 7,200 people worldwide.
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