Food Empire - KGI Securities 2024-08-23: More Capacity, More Growth

• Food Empire (SGX:F03) saw a sustained increase in sales across its core markets in 1H24, showcasing a resilient consumer demand for the company’s products, which saw volume growth y-o-y, especially in the Southeast Asia and South Asia regions.
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Ramped up capacity in Malaysia.

• Food Empire recently completed the expansion of its non-dairy creamer production facilities in Malaysia. Commercial production started on 1st April, boosting production of non-dairy creamer going forward.
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1H24 Financial Results.

• Food Empire reported higher revenue of US$225.2mil for 1H24, up 13.6% y-o-y, compared to US$198.2mil in 1H23, led by strong growth in its South-East Asia and South Asia market, which saw a growth of 34.8% and 36.0% respectively.
• Food Empire’s Ukraine, Kazakhstan and CIS market saw a growth of 15.7% y-o-y, while the Russia market saw a decrease in revenue by 3.6% y-o-y. In local currency term, Food Empire saw revenue growth across all its key markets, showcasing strong in consumer demand amidst the ongoing geopolitical tensions worldwide, in a high-interest rate environment.
• However, Food Empire reported a decrease in net profit after tax by 12.8%, from US$26.6mil in 1H23 to US$23.2mil in 1H24, as a result of lower profit contribution from the Group’s Russia market arising from short-term price disruption in the market, higher ingredient prices, and higher operating expenses, partly offset by higher profit contribution from the rest of the Group’s segments.

Upbeat outlook

Resilient demand for Food Empire’s products.

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Tang Kai Jie KGI Securities Research | https://www.kgieworld.sg/ 2024-08-23 SGinvestors.io

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