Kuala Lumpur – Fraser & Neave Holdings Bhd (F&NHB) announced a resilient financial performance for the first half of its financial year ending 31 March 2025 (1H FY2025), demonstrating strength amidst macroeconomic pressures, weak consumer sentiment, and market volatility.
F&NHB posted a 1.4% year-on-year revenue growth to RM2.72 billion in 1H FY2025, driven by broad-based sales expansion across business segments in the first quarter. Its operating profit increased by 4.3% to RM434.8 million, supported by improved margins from higher revenue and lower input costs in its Food & Beverages (F&B) Malaysia and Indochina segments, which helped offset early-stage losses from its dairy farming operations.
While 1H performance remained strong overall, revenue in Q2 FY2025 declined by 1.4% year-on-year to RM1.33 billion, mainly due to slower festive sales in F&B Malaysia and lower F&B Indochina sales. The decline in Malaysia was attributed to subdued consumer sentiment and flood-related disruptions in East Malaysia. F&B Indochina revenue slipped due to strategic inventory adjustments in Thailand.
Consequently, F&NHB operating profit in Q2 fell 7.6% year-on-year due to lower sales and continued losses from the start-up phase of its dairy farm, F&N AgriValley.
For 1H FY2025, profit before tax grew 4.9% to RM430.1 million, while profit after tax dropped 7.6% to RM310.4 million, primarily due to the end of the Board of Investment (BOI) tax incentive for the Indochina operations.
In line with its performance, the Board declared a single-tier interim dividend of 30.0 sen per share, consistent with the previous year, amounting to RM110.0 million, to be paid on 30 May 2025.
Strategic Growth, Dairy Farm Milestone & Contribution to National Food Security
Its Chief Executive Officer, Lim Yew Hoe highlighted progress in several key strategic investments, particularly F&N AgriValley, the F&NHB Integrated Dairy Farm in Gemas, Negeri Sembilan, aimed at reducing dependency on imported dairy and contributing to Malaysia’s food security.
To date, over 2,700 Holstein heifers from Chile have arrived and acclimatised at the 2,726-acre farm. Among them, more than 70 calves have already been born, with milking for the commercial batch of 2,500 cattle scheduled to commence in June 2025 under the Magnolia brand.
F&NHB’s Phase 1 target is to produce 100 million litres of local fresh milk annually, scaling up to 200 million litres with 20,000 milking cows in later phases. Additionally, the farm is expected to supply 10,000 meat animals yearly and produce tens of thousands of tonnes of corn grain and animal feed, integrating upstream and downstream operations for long-term sustainability and cost efficiency.
“Our long-term goal is to contribute meaningfully to the country’s food security agenda by reducing reliance on imported milk and strengthening domestic supply. The arrival of these Chilean heifers marks a major step toward establishing a productive local herd that will provide all Malaysians with quality fresh milk at more affordable prices,” Lim remarked.
Progress on Regional Expansion
F&NHB’s dairy manufacturing plant in Cambodia remains on schedule for commercial production by early 2026, complementing the F&NHB expanding Indochina footprint.
Meanwhile, the Penang beverages plant, designed to serve northern Peninsular Malaysia, is set to commence operations by August 2025.
“The newly installed production capability in Penang will produce carbonated soft drinks and drinking water catered to the northern Peninsular Malaysia markets. This achieves both the objective of better serving the local markets, and reducing our carbon footprint compared to servicing from our main plant in Shah Alam,” said Lim.
Cautious Yet Focused Outlook
F&NHB acknowledges the ongoing challenges of a weakened global economic environment, evolving regulations, and soft consumer demand. It remains cautious in the short term but optimistic for the future, supported by prudent financial discipline, strategic capital investments, and strong operational foundations.
“At the same time, we remain focused on driving growth, strengthening route-to-market capabilities, optimising assets and operational efficiencies, and continue to invest in areas that will support long-term value creation and strengthen the Group’s fundamentals,” Lim added. -MalaysiaGazette
