Fraser and Neave, the Singapore-based food and beverage group, saw exchange rates and “tactical” discounts eat into sales from its dairies business in the first half of the company’s financial year but lower input costs helped profits grow.

The group booked a 66% jump in EBIT from its dairies business to S$66m (US$48.2m) for the six months to the end of March. F&N’s dairies operations in Malaysia and Thailand were helped by savings in input costs.

Revenue from the dairies division fell 7%to S$533m. Exchange rates weighed on sales in Malaysia and Thailand. However, F&N’s dairies business in Malaysia saw sales decline 3% on a constant-currency basis, due to higher discounts given to trade customers. In Thailand, where revenue was down 3% on a reported basis, excluding the impact of currency fluctuations, sales rose 2% on the back of a three percentage point gain in volumes.

Group-wide revenue increased 8.2% to S$962.8m. EBIT was up 26.6% at S$82.1m. Net profit grew 44.5% to S$73.7m.

“Our emphasis on brand building and channel penetration has enabled us to maintain our leading positions in core markets,” F&N chairman Koh Poh Tiong said. “However, we remain cautious amidst a soft global economy and subdued consumer sentiments, and we will continually review our marketing spend and investment plans, taking into account the economic environment. Despite this, the group continues to have its sights fixed firmly on regional expansion, particularly Indonesia, Myanmar and Vietnam. We are confident that we will strike the right balance between seeding and growing new markets for long-term sustainable growth and delivering financial performance this year.”