- Maintain BUY rating on Food Empire (SGX:F03), new S$1.75 target price from S$1.53, 22% upside and ~4% FY24F yield. Our outlook for Food Empire has become more positive after it posted strong core earnings for FY23.
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FY23F earnings in line.
- Food Empire's earnings of US$57m (+14% y-o-y) and revenue of US$426m (+7% y-o-y) are in line with our estimates. Revenue was driven by the Ukraine, Kazakhstan, Commonwealth of Independent States (CIS) (US$111m, +21% y-o-y), South Asia (US$49m, +24% y-o-y), and South-East Asia (US$102m, +10% y-o-y) markets.
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- All core markets recorded sales growth in local currency terms, led by higher sales volumes and an increase in selling prices.
- Its gross profit margin improved by 3.4ppt y-o-y to 33.2% as Food Empire sold higher-margin items. EBIT and EBIT margin were in line with our estimate, at S$71m and 17%. As a result of both sales and gross profit margin growth, the group’s core net profit for FY23 expanded by 24% y-o-y.
Special dividend declared
- Read more at SGinvestors.io.
