F&N Lets Its Strong Results Do The Talking

Source : The Straits Times, Nov 14, 2007

Net profit up 18.5% on robust growth in dairies, breweries, property businesses.

IT WAS meant to be Mr Lee Hsien Yang’s baptism of fire in his first results briefing as Fraser and Neave’s (F&N’s) chairman.

Analysts and the media eagerly awaited the appearance of the former SingTel chief - with many questions on their minds.

Would there be a change in F&N’s strategy following the departure of former chief executive officer (CEO) Han Cheng Fong over a month ago? His departure was linked to differences of opinion with the F&N board.

They also wanted to hear from Mr Lee, now the acting CEO, about the search for a replacement, but they were disappointed as Mr Lee did not show up. F&N group company secretary Anthony Cheong chaired the results briefing.

‘This is a management exercise. Mr Lee is a non-executive chairman and also he’s acting chief executive,’ Mr Cheong replied to the obvious question.

‘We didn’t ask him to come because this is a management exercise and he’s a non-executive chairman,’ he reiterated again later, when asked if Mr Lee is overseeing management.

Later, Mr Cheong said staff morale is fine.

‘Hsien Yang is very focused, and he works very hard. We’re learning to work with him,’ he said, adding that they do not have any ‘progress to report’ about the CEO search. Apart from external hires, Mr Cheong said F&N is also open to considering internal candidates.

He also restated that F&N has no plans to spin off any of its three core businesses: property, food and beverage, and publishing.

The rest of the panel, including F&N financial controller Patrick Goh, Frasers Centrepoint Group CEO Lim Ee Seng and Asia Pacific Breweries (APB) chief Koh Poh Tiong, did not weigh in on the hiring issues.

They preferred to let the results do the talking.

During the presentation, Mr Koh said APB’s net profit for the year ended Sept 30 rose 2.9 per cent to $133.7 million, as higher beer sales offset the cost of building new breweries.

APB is F&N’s joint venture with Heineken.

F&N also did well, posting an 18.5 per cent rise in net profit for the year to $378.6 million from $319.5 million in the corresponding period last year.

Revenue grew strongly to $4.74 billion for the year ended Sept 30, which was 25 per cent higher than last year’s.

This was underpinned by strong revenue growth from its dairies, breweries and development property segments.

In a statement, Mr Lee said that F&N has achieved record levels of growth and profits.

‘We are now harvesting the results of our relentless pursuit of regional expansion and investment in multi-core businesses, which have delivered sustainable long-term growth,’ he said.