KUALA LUMPUR: Consumer sentiment may remain feeble due to the resurgence of Covid-19 cases in Malaysia but some analysts feel demand for Fraser & Neave Holdings Bhd's (F&N) products should remain robust given the stronger in-home consumption pattern.
Analysts at MIDF Research said higher raw material costs might result in cost pressure.
Despite this, they believe F&N would be able to weather through the challenges given its strong product portfolio, agile business strategies as seen through its e-commerce focus and a strong balance sheet.
F&N's financial year 2020 net profit missed MIDF Research' expectations but was in line with consensus.
"Its full-year earnings made up 89.4 per cent of our estimates. However, it met consensus' estimates at 97.3 per cent. The difference to our expectation can be attributed to higher than expected operating cost during the period," the firm said today.
F&N chief executive officer Lim Yew Hoe has deemed its 2019 as "resilient" and expects things to get better in the year ending September 30, 2021 (FY2021).
Lim did not indicate any business guidance but believed F&N would likely do no worse than 2020.
F&N's sales traditionally would be dependent on festive seasons but the main celebrations – the Hari Raya and Chinese New Year - had been hit by the pandemic this year, Lim said at a virtual briefing on its FY2020 results today.
The company posted RM410.1 million net profit in FY2020, compared to RM410.2 million in FY2019. Revenue stood at RM3.99 billion from RM4.08 billion previously.
Revenue of its F&B business in Malaysia stood at RM495.1 million, almost on par with the corresponding quarter last year, led by a 2.4 per cent growth in export sales in addition to some recovery of domestic sales during the Recovery Movement Control Order period.
Lim said the company was driving its environmental push with a RM30 million investment into energy conservation.
As part of the investment, it will embark on 10 megawatt peak (MWp) solar roof projects at its plants in Shah Alam, Pulau Indah and Bentong.
"We will replace at least 20 per cent of our total energy requirement in Malaysia with clean energy by 2022.
"The solar projects are part of the RM30 million commitment to be utilised over the next two years into renewable energy programmes and projects that contribute to energy efficiency and carbon emission reduction," Lim said.
He said F&N had placed even greater urgency on the need to manage environmental and social risks that could affect the lives and livelihood of its employees, suppliers, customers, as well as the community.
In April this year, the company commissioned its first solar photovoltaic (PV) system at the Rojana plant in Thailand.
The 30 million baht solar roof, with a generating capacity of 1MWp, has reduced the plant's energy offtake from the grid, lowering both energy cost as well as carbon footprint in its operations.
Next, the 10 MWp of total solar energy capacity at its Shah Alam, Pulau Indah and Bentong plants.
Once completed in 2021, they will generate clean energy equivalent to the electricity consumption of 3,700 typical households in the country.
Lim also said a large part of F&N''s RM800 million capex over the last five years was aimed at achieving operational and cost efficiencies through economies of scale and shortening the route to the different markets.