F&N Limited 9M2025 Financial Results: Strong Revenue Growth, Lower Profit on Associate Weakness

Fraser and Neave Limited (F&N) has released its unaudited financial report for the nine months ended 30 June 2025 (9M2025). The group posted robust revenue growth, primarily driven by strong performances in its Beer and Dairy segments. However, overall profitability declined due to reduced contributions from its associate, Vinamilk. Below is a detailed analysis of the key financial metrics, business segment performance, and notable corporate developments during this period.

Key Financial Metrics and Comparative Analysis

¹ 1H2025 interim dividend was distributed on 6 June 2025.

Business Segment Performance

• F&B Segment: Drove overall revenue growth with a 12% YoY increase, led by beverages and dairy products.
• Beverages: Saw higher water volumes and strong soft drinks sales, particularly from a successful Chinese New Year rollout and higher beer sales, especially the TAPPER brand.
• Dairies: Achieved robust growth from higher canned milk sales in Thailand and export markets, supported by the School Milk Programme.
• Publishing & Printing (P&P): Experienced a slight revenue decline (-1%) due to the absence of one-off contributions present in the previous year.

Profitability by Business

• Dairies: Drove F&B earnings growth (+4%), particularly in Malaysia (+57%) and Thailand (+12%), helped by lower input costs. However, this was partially offset by a 16% decline in profit contribution from Vinamilk.
• Beverages: Soft drinks earnings were impacted by an unfavorable sales mix, though beer performance and lower input costs provided a buffer.
• P&P: Earnings fell due to decreased sales and higher printing costs.

Geographical Performance

• Malaysia: Revenue and earnings grew, mainly due to higher dairy volumes and favorable forex effects, though Food segment contribution declined.
• Thailand: Delivered higher profits from increased canned milk sales, reduced marketing spend (due to phasing), and positive forex translation.
• Singapore: Revenue declined despite strong dairy sales, following a streamlining of export business.
• Others (including Myanmar): Revenue growth was largely attributed to higher beer volume in Myanmar.
• Vietnam: Lower share of profit from Vinamilk (-16%) notably impacted group profit.

Balance Sheet and Capital Structure

• Cash & Bank Balances: \$425.8M (down from \$529.6M at FY2024)
• Borrowings: \$1,118.8M (down from \$1,165.1M at FY2024)
• Gearing: Increased to 21.4% from 18.8%.
• Debt Profile: 84% fixed rate, 16% floating rate; most debt has >1 year maturity.

Corporate Developments

• F&N AgriValley Dairy Farm: Commercial production began in June 2025. The facility, Malaysia’s largest integrated dairy farm, now houses over 3,500 cattle, with plans to expand to 20,000 milking cows. This initiative supports F&N’s sustainability goals and local food security, with a projected annual output of up to 200 million litres of fresh milk upon completion of Phase 1.
• New Dairy Facility in Cambodia: Construction is on track for operation in early 2026. The facility will initially focus on canned milk, with future expansion planned to other dairy products.
• Product Innovation: F&N expanded its health-focused portfolio with products like MAGNOLIA Cholest Care (Singapore) and 100PLUS Power Peach Zero (Singapore, Malaysia), as well as premium flavored milk innovations.
• Strategic Collaborations: Partnerships aimed at driving consumer appeal and innovation were highlighted as contributing to brand differentiation and market buzz.

Dividends and Payout Trends

• Interim dividend for 1H2025 was 1.5 cents per share, unchanged from the previous period.
• Dividend payout ratios have remained consistent, reflecting a stable approach to capital returns.

Outlook and Risks

• The company notes strong topline momentum, especially in F&B, but cautions that lower associate contributions (notably Vinamilk) may continue to weigh on overall profit.
• Ongoing investments in dairy infrastructure (Malaysia, Cambodia) are expected to enhance supply resilience and regional capabilities.
• No mention of exceptional earnings/expenses, asset revaluations, legal disputes, or major macroeconomic shifts in this report period.

Conclusion

F&N Limited delivered solid revenue growth in 9M2025, underpinned by robust performances in its beverages and dairies businesses, especially in Malaysia and Thailand. However, profitability was tempered by a significant decline in associate (Vinamilk) contributions and some margin pressure. The group’s strategic focus on dairy infrastructure expansion and product innovation positions it well for long-term growth, but near-term profit performance may remain subdued if associate results do not recover. Overall, the financial performance appears neutral to moderately positive, with topline strength offset by associate headwinds and only modest dividend growth.

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