- Food Empire (SGX:F03) reported a strong 1H23 with PATMI declining 1.6% to US$26.6m and forming 55% of our FY23 forecast. This exceeded both MIBG/consensus estimates and came despite a forex y-o-y difference of –US$8m.
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- Management plans to raise prices in its core markets by 7-15% from next month in two tranches due to the depreciation of the ruble in recent months. As a result, we raise our FY23/24 PATMI estimates for Food Empire by 5% and increase our target price to S$1.36 (+5%), pegged to 11x FY23E P/E.
Strong performance in core markets to persist
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- Demand from Vietnam has also reversed a decline and increased y-o-y due to the group’s marketing efforts. Gross margins have also improved from 29.3% to 35.1%.
- Food Empire's operating profit surged 67.7% y-o-y to US$34.6m. PATMI declined 1.6% y-o-y mainly due to a FX difference of US$8m.
Prices hikes to combat depreciating ruble
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