F&NHB Continues to Capture Value from Strategic Investments and Cost Optimisation

Fraser & Neave Holdings Bhd (“F&NHB” or “the Group”) held its 63rd Annual General Meeting today. In a presentation to shareholders on behalf of the board and management, F&NHB Chief Executive Officer Lim Yew Hoe highlighted the Group’s financial results and other developments in FY2024, covering the period from 1 October 2023 to 30 September 2024.

The Group achieved a record full year revenue of RM5.25 billion, up 4.9% from FY2023, boosted by higher domestic sales by Food & Beverages Malaysia (F&B Malaysia) and Food & Beverages Thailand (F&B Thailand), and exports to Cambodia. Group operating profit for FY2024 increased by 10.4% to RM709.5 million from the previous year. Meanwhile, Group profit after tax increased by 0.4% year-on-year to RM544.3 million despite higher tax expenses.

F&NHB Chief Executive Officer Lim Yew Hoe remarked, “The Group’s performance in FY2024 reaffirms our resilience in a fast-evolving environment. We achieved robust profits and maintained a strong cash position despite the higher start-up costs for new ventures. Our continued strategic investments and cost optimisation initiatives have enabled us to sustain healthy growth momentum while navigating external challenges in the global marketplace.”

“Our efforts across the year included a keen focus on identifying opportunities to capture value from existing operations for the benefit of the Group and our stakeholders. By strategically leveraging opportunities, we have further strengthened relationships with shareholders, customers, partners, employees, and the community,” Lim added.

Shareholders expressed confidence in F&NHB’s direction, as Lim explained the Group’s roadmap for enhancing value and capturing a greater share along the value chain – future-proofing the business to maintain a healthy profit margin and mitigate the impact of additional taxes.

Building Future Growth
Lim also presented the Group’s strategy to build up Halal Packaged Foods and Dairy as F&NHB’s next growth pillars in the midterm.

“Halal Packaged Foods is a key pillar in our strategy to drive both top and bottom-line growth. Our continuous efforts to create synergies within the Group, including streamlining and standardising operations following the acquisition of Sri Nona and Cocoaland in FY2022, have improved profit margins, enhanced operational efficiency, and enabled more effective decision-making processes. Beyond products, we also aim to be thought leaders in the Halal space, collaborating with stakeholders like Halal Development Corporation Berhad (HDC) to raise awareness of the quality and diversity of our Halal offerings,” he said.

He reported steady progress on the F&N AgriValley dairy farm project in Gemas – a new agricultural initiative developed by the Group alongside optimising current businesses. “Despite the delayed arrival of our first heifers, which deferred our initial milking schedule, we are confident in meeting our goal to support national food security in line with Malaysia Madani. Currently, discussions with alternative sources are in progress. Concurrently, work on Phase 1 of the farm’s infrastructure is continuing at pace, in preparation for kicking off operations when the livestock arrive.”

Lim underscored the Group’s balanced focus between growth initiatives in agriculture and its traditional businesses. “We are equally committed to investing in our core businesses as part of our long-term growth strategy. Other than our new dairy manufacturing plant in Cambodia’s Suvannaphum Special Economic Zone to bolster our presence, other new capital expenditures to complement existing operations and capture future value include a new carbonated beverages and drinking water line in Butterworth, and a new sterilised milk filling and packing line in Pulau Indah.”

He also provided an update on F&NHB’s progress in reducing carbon emissions. In 2024, the Group installed over 6.38 MWp of additional clean energy capacity at five locations around Malaysia comprising two existing plants and three new food plants, set to further reduce greenhouse gas (GHG) emissions by 6,600 MT CO2e annually while delivering savings of up to RM3.9 million per year. The new installations add to previous solarisation initiatives, when a total of 10MWp of solar capacity was installed at three plants in Malaysia and another combined 3MWp at facilities in Thailand.

In addressing the rising costs of energy and wages, Lim assured shareholders that the Group is well capitalised to manage these increases, affirming its confidence in its financial strength, solid cash flow position, and strategic plans moving forward. “Looking ahead to 2025, while we expect margins to remain tight in light of tax rebate rollbacks in Thailand and higher start-up costs for AgriValley, we are confident of making up for the extra expenditure by optimising our assets and operational efficiencies in Malaysia and Thailand, while remaining vigilant and responsive to market shifts, geopolitical uncertainties and macroeconomic changes. The potential of AI adoption and automation can further flatten our chains of command, value, and supply to enhance efficiency, improve responsiveness and foster a more collaborative work environment, in turn optimising decision making and driving innovation to sustain growth in an increasingly competitive landscape.”

Recognised for Excellence
Touching on the Group’s values, F&NHB Chairman YAM Tengku Syed Badarudin Jamalullail said, “Our actions and achievements have further entrenched our commitment to delivering Pure Enjoyment, Pure Goodness in a way that aligns with our guiding principles of building a “better business,” contributing to a “better planet”, and nurturing a “better society.”

F&NHB was listed in the Sustainability Yearbook 2024 by S&P Global, ranking among the top five companies globally within the beverages industry. The Group is also among 120 constituents of the FTSE4Good Bursa Malaysia Index (F4GBM) for the sixth year running, as the Top 1% within the global FTSE Industry Classification Benchmark Supersector.

Other accolades achieved by the Group across FY2024 include winning in the FBM Mid 70 Index category at PwC Malaysia’s Building Trust Awards 2023; ranking in the Top 50 Excellence Award at the National Corporate Governance & Sustainability Awards (NACGSA) 2024, as well as being recognised in the Best Companies to Work for in Asia Award 2023 and at the Graduates’ Choice Award 2024 as a Top 3 Employers of Choice for Graduates to Work for in 2023 within the Fast-Moving Consumer Goods (FMCG) category.

Changes in the Board
During the AGM, YAM Tengku Syed Badarudin announced the retirement of David Siew Kah Toong, who had completed his term as an Independent Non-Executive Director. Meanwhile, new Directors joining the Board upon completion of the AGM comprised Michael Lau Hwai Keong, joining as an Independent Non-Executive Director, and Tongjai Thanachanan, joining as a Non-Independent Non-Executive Director. “On behalf of the Board and Management, I thank David Siew for his contributions to the Group. I also welcome our new directors to the Board. With their extensive experience, they will undoubtedly add new perspectives and bring significant value to the Group,” he commented.

Dividend Approved
Shareholders at the AGM approved a final single-tier dividend of 33.0 sen per share (2023: 33.0 sen per share) for the financial year ended 30 September 2024, bringing the total dividend for FY2024 to 63.0 sen per share (FY2023: ordinary dividend of 60.0 sen per share and an additional special dividend of 17.0 sen per share), amounting to RM231.1 million (2023: RM282.4 million). The final dividend amounting to approximately RM121.0 million (FY2023: RM183.4 million) is scheduled to be paid on 10 February 2025.