Food and beverage manufacturer Food Empire Holdings (FEH) has announced improved results for its H1 ended 30 June 2002, with group Turnover up 32.6% to S$44.3m (US$25.3m) on the back of broad-based growth across all key markets of Russia, Eastern Europe and Central Asia.

Group post-tax profit attributable to shareholders registered a 25% increase to S$4.8m year on year due to higher turnover, a general reduction in cost of raw materials especially coffee and improved operational efficiencies. At the operating level, EBITDA improved 56.1% to US$8.3m.

Tan Wang Cheow, chairman and MD said: "Despite the difficult business conditions that continued into 2002, we are pleased that the group continued to do well for the H1. Business grew in all our key markets of Russia, Eastern Europe and Central Asia, as we were able to strengthen our market presence and sales of our products. "
Segmental analysis

The bulk of FEH's Turnover in the H1 2002 continued to come from international sales. Russia, a core market, contributed 59.2% of group revenue while Eastern Europe and Central Asia contributed 26.9% in the H1. Sales from other markets made up the balance 13.9% of group revenue.

FEH's business in Russia registered a 27.5% jump in turnover to S$26.2m due to deeper market penetration and more aggressive marketing and advertising. Pre-tax profit (PBIT) rose 5.3% to S$5.3m during the period under review.

Combined sales in Eastern Europe and Central Asia grew 19.5% to S$11.9m while PBIT increased 30.2% to S$1.7m. This was attributable to a bigger distribution network and increased emphasis on brand building and marketing.

Sales also increased across all product categories for the period under review. Turnover for the beverage division rose 23.3% to 39.1 million. The non-beverage category surged 207.5% to S$5.2m. Beverage products made up 88.3% of group turnover, a reduction from 95% previously following an increase in sales from the other products division.

To grow the business, FEH continued launching more new products and expanding its existing ranges. For instance, it has recently launched new candies - MacCandy Cola range in fizzy cola flavours and MacCandy Chewy range in a variety of flavours - to boost demand for its confectionery.

For the H1 2002, earnings per ordinary share rose to 1.40 cents from 1.12 cents previously while Net Tangible Asset backing per ordinary share was up 32.8% to 11.75 cents.

Commenting on the rest of this year, Tan said: "We continue to operate in a very competitive overseas environment. Nonetheless, we will reinforce our position and presence in our core markets through our distributor network and the introduction of more new products. We will also intensify our marketing and advertising programmes in our key markets in the H2, traditionally the better selling season. The group will also step up efforts to increase market share in Indo-China and China.

"We plan to launch more new products to widen our range of offerings and to enhance our market position in key markets. We will also seek new markets for our core beverage business and for the confectionery and food products." 

Foreign currency fluctuations will be a consideration as the bulk of the group's turnover comes from overseas. Barring unforeseen circumstances, the board expects the group to continue its performance in the H2 2002.