Food Empire - UOB Kay Hian 2024-09-04: Margins Hampered By High Coffee Costs & Excess Inventory; Downgrade To HOLD

Food Empire - Margins Hampered By High Coffee Costs & Excess Inventory; Downgrade To HOLD

Published:
Food Empire (SGX:F03) | SGinvestors.ioFood Empire (SGX:F03)
  • Food Empire (SGX:F03) reported PATMI of US$23.6m (-11.3% y-o-y) for 1H24, accounting for 51% of our full-year forecast and in line with expectations.
  • The y-o-y decline is largely attributable to short-term price disruptions in the Russia market, and increased raw material prices and operating costs. This was partially offset by higher contributions from all other operating markets. As a result, 1H24 gross and net margins slumped 5ppt y-o-y and 3ppt y-o-y to 30% and 10.5% respectively, matching our expectations.

Double-digit revenue growth across core markets...

  • - Read this at SGinvestors.io -
  • Sales in South Asia was driven by higher pricing due to cost pass-through, while sales in Southeast Asia was boosted by leading sales in Vietnam and strong demand in Malaysia. The Ukraine, Kazakhstan, and CIS regions also achieved notable growth, with a 15.7% y-o-y increase to US$57.3m on higher sales volume.

… with the exception of Russia which was impacted by currency devaluation and high inventory levels.

  • - Read this at SGinvestors.io -
  • We note that in local currency terms, the segment saw a substantial 13.4% y-o-y growth, due to increased promotions.

Continued margin pressure from higher coffee prices.

  • Read more at SGinvestors.io.




Above is the excerpt from report by UOB Kay Hian Research.
Clients of UOB Kay Hian may be the first to access the full report in PDF @ https://www.utrade.com.sg/.




John Cheong UOB Kay Hian Research | Heidi Mo UOB Kay Hian | https://research.uobkayhian.com/ 2024-09-04



Previous report by UOB:
2024-05-10 Food Empire - 1Q24 Revenue In Line; Coffee Prices Expected To Impact Margins.

Price targets by 3 other brokers at Food Empire Target Prices.

Listing of research reports at Food Empire Analyst Reports.

Relevant links:
Food Empire Share Price History,
Food Empire Announcements,
Food Empire Dividends & Corporate Actions,
Food Empire News Articles





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