News

Half Year Financial Statement And Dividend Announcement

The Board of Directors of Food Empire Holdings Limited is pleased to announce the unaudited results of the Group and Company for the six months ended 30 June 2002.
These figures have not been audited.

-	-	Group			Company
-	-	S$'000		%	S$'000		%
-	-
-	-	1st Half 2002	1st Half 2001	Increase/ (Decrease)	1st Half 2002	1st Half 2001	Increase/ (Decrease)
1.(a)	Turnover	44,313	33,430	32.55	4	146	(97.26)
1.(b)	Direct expenses excluding depreciation and amortisation (Note 1)	36,063	28,220	27.79	232	207	12.08
1.(c)	Profit from operations before other income, depreciation and amortisation	8,250	5,210	58.35	(228)	(61)	273.77
1.(d)	Investment income	0	0	0	0	0	0
1.(e)	Other income including interest income	70	119	(41.18)	144	24	500.00
2.(a)	Operating profit before income tax, minority interests, extraordinary items, interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items	8,320	5,329	56.13	(84)	(37)	127.03
2.(b)(i)	Interest on borrowings	28	1	NM	0	0	0
2.(b)(ii)	Depreciation and amortisation	488	370	31.89	0	0	0
2.(b)(iii)	Foreign exchange gain/(loss)	(907)	920	NM	(39)	0	0
2.(c)	Exceptional items (provide separate disclosure of items)	0	0	0	0	0	0
-	-
-	-	S$'000		%	S$'000		%
-	-
-	-	1st Half 2002	1st Half 2001	Increase/ (Decrease)	1st Half 2002	1st Half 2001	Increase/ (Decrease)
2.(d)	Operating profit before income tax, minority interests and extraordinary items but after interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items	6,897	5,878	17.34	(123)	(37)	232.43
2.(e)	Income derived from associated companies (With separate disclosure of any items included therein which are exceptional because of size & incidence)	(92)	(70)	31.43	0	0	0
2.(f)	Operating profit before income tax	6,805	5,808	17.17	(123)	(37)	232.43
2.(g)	Less income tax (Indicate basis of computation) (Note 2)	1,375	1,455	(5.50)	0	0	0
2.(g)(i)	Operating profit after tax before deducting minority interests	5,430	4,353	24.74	(123)	(37)	232.43
2.(g)(ii)	Less minority interests	616	502	22.71	0	0	0
2.(h)	Operating profit after tax attributable to members of the company	4,814	3,851	25.01	(123)	(37)	232.43
2.(i)(i)	Extraordinary items (provide separate disclosure of items)	0	0	0	0	0	0
2.(i)(ii)	Less minority interests	0	0	0	0	0	0
2.(i)(iii)	Extraordinary items attributable to members of the company	0	0	0	0	0	0

-	-	Group			Company
-	-	S$'000		%	S$'000		%
-	-
-	-	1st Half 2002	1st Half 2001	Increase/ (Decrease)	1st Half 2002	1st Half 2001	Increase/ (Decrease)
2.(i)(iv)	Transfer to/from Exchange Reserve	0	0	0	0	0	0
2.(i)(v)	Transfer to Capital Reserve	0	0	0	0	0	0
2.(i)(vi)	Transfer to Reserve Fund	0	0	0	0	0	0
2.(j)	Operating profit after tax and extraordinary items attributable to members of the company	4,814	3,851	25.01	(123)	(37)	232.43

NM - Not Meaningful

Note 1

	Group			Company
	1st Half 2002	1st Half 2001	Change	1st Half 2002	1st Half 2001	Change
	S$'000	S$'000	%	S$'000	S$'000	%
Changes In Inventories of Finished Goods	(2,378)	(3,728)	(36.21)	0	0	0
Raw Materials and consumables used	23,361	19,692	18.63	0	0	0
Staff Costs	2,400	2,104	14.07	0	0	0
Other Operating expenses	12,680	10,152	24.90	232	207	12.08
Direct expenses excluding depreciation and amortisation	36,063	28,220	27.79	232	207	12.08

Note 2

The tax expenses for the Singapore subsidiaries are computed at the current tax rate of 22%, while the tax expense for the Malaysian subsidiary is computed at the current tax rate of 28%.

Group Figures
-	-	Latest period	Previous corresponding period
3.(a)	Operating profit [2(g)(i) above] as a percentage of turnover [1(a) above]	12.25%	13.02%
3.(b)	Operating profit [2(h) above] as a percentage of issued capital and reserves at end of the period	11.89%	12.61%
3.(c)	Earnings per ordinary share for the period based on 2(h) above after deducting any provision for preference dividends:-
	(i) Based on weighted average number of ordinary shares in issue	1.40 cents	1.12 cents
	(ii) On a fully diluted basis (To disclose the basis used in arriving at the weighted average number of shares for the purposes of (c)(i) above and to provide details of any adjustments made for the purpose of (c)(ii) above)	1.37 cents	1.12 cents
3.(d)	Net tangible asset backing per ordinary share based on existing issued share capital as at the end of the period reported on	11.75 cents	8.85 cents

3.(e) To provide an analysis of expenses based on their function within the group for

the current and previous corresponding period

Please refer to Section 1(b) and Note 1.





Note 3 to item 3(c)(i) and (ii)

Basis for calculation of weighted average number of ordinary shares for basic and diluted earnings per share.



Group	Latest period	Previous corresponding period
	'000	'000
Weighted average number of ordinary shares used in the calculation of basic earnings per share	344,000	344,000
Weighted average number of unissued ordinary shares under share options	17,720	NIL
Number of shares that would have been issued at fair value	(11,586)	NIL
Weighted average number of ordinary shares (diluted)	350,134	344,000

 

-	-	Group			Company
Item 4 is not applicable to interim results		S$'000		%	S$'000		%
-	-
-	-	1st Half 2002	1st Half 2001	Increase/ (Decrease)	1st Half 2002	1st Half 2001	Increase/ (Decrease)
4.(a)	Sales reported for first half year
4.(b)	Operating profit [2(g)(i) above] reported for first half year
4.(c)	Sales reported for second half year
4.(d)	Operating profit [2(g)(i) above] reported for second half year

5.(a) Amount of any adjustment for under or overprovision of tax in respect of prior years

NIL

5.(b) Amount of any pre-acquisition profits

NIL

5.(c) Amount of profits on any sale of investments and/or properties

Item 5c Table

Sale of investments/properties	$Profit/(Loss)
NIL

5.(d) Any other comments relating to Paragraph 5

NIL

6. Segmental Results

(a) By Geographical Markets



	Russia	Eastern Europe & Central Asia	Other Markets	Total
	S$'000	S$'000	S$'000	S$'000
1st Half 2002
Turnover	26,229	11,921	6,163	44,313
Profit/(Loss) Before Tax	5,333	1,732	(140)	6,925
Less: Interest Expenses	-	-	-	(28)
Share of result of associated company	-	-	-	(92)
Total				6,805
1st Half 2001
Turnover	20,566	9,978	2,886	33,430
Profit/(Loss) Before Tax	5,066	1,330	(517)	5,879
Less: Interest Expenses	-	-	-	(1)
Share of result of associated company	-	-	-	(70)
Total				5,808


(b) By Products



	Beverages	Others	Total
	S$'000	S$'000	S$'000
1st Half 2002
Turnover	39,125	5,188	44,313
Profit/(Loss) Before Tax	7,011	(86)	6,925
Less: Interest Expenses	-	-	(28)
Share of result of associated company	-	-	(92)
Total			6,805
1st Half 2001
Turnover	31,743	1,687	33,430
Profit/(Loss) Before Tax	6,029	(150)	5,879
Less: Interest Expenses	-	-	(1)
Share of result of associated company	-	-	(70)
Total			5,808


Note: Beverages include coffee, tea, chocolate and cereal
Others include candy and frozen food

7.(a) Review of the performance of the company and its principal subsidiaries

Turnover

In the first six months to 30 June 2002, the Group continued to perform well. Despite sluggish global economic conditions, Group turnover registered a healthy increase of 32.6% from $33.4 million to $44.3 million. All the key markets of Russia, Eastern Europe and Central Asia continued to record positive growth in turnover. Russia occupied a core position with 59.2% of the Group's turnover while Eastern Europe and Central Asia contributed 26.9%.

In Russia, the Group achieved an increase in turnover of 27.5% from $20.6 million to $26.2 million. The performance was attributable to deeper market penetration and more aggressive advertising carried out during the period under review.

In Eastern Europe and Central Asia, the Group continued to witness a healthy increase of 19.5% from $10.0 million to $11.9 million. The Group continued to build on its distribution network and placed heavy emphasis on brand equity building and marketing.

In the Other markets, the Group registered an increase in turnover from $2.9 million to $6.2 million. This was due mainly to the Group's entry into the wholesale business of frozen food.

Due to increased sales of non-beverage products, beverage sales contribution to the Group's turnover is 88.3%, compared to 95.0% previously. Turnover of the beverage division increased 23.3% from $31.7 million to $39.1 million while the non-beverage category achieved a 207.5% increase from $1.7 million to $5.2 million.


Operating Profit

The Group's Operating Profit After Tax and Minority Interest increased 25.0% from $3.9 million to $4.8 million. This is in line with the broad-based increase in Group turnover, general reduction in raw materials prices especially in coffee, and improved operational efficiencies. The Group's Profit was affected by an exchange loss of $0.9 million as a result of the decline in the US Dollar exchange rate against the Singapore Dollar. Furthermore, the Group had embarked on more extensive advertising activities which increased the Group's expenses by $2.9 million over the corresponding period. However the Group believes that this is essential in building up the Group's brand equity and will further enhance its position in the marketplace in the long term.

7.(b) Where a forecast, or a prospect statement, has been previously disclosed to shareholders,

the issuer must explain any variance between the forecast or prospect statement and the
actual results

NIL

7.(c) A statement by the Directors of the Company whether any item or event of a material or

unusual nature, which would have affected materially the results of operations of the Group
and Company, has occurred between the date to which the report refers and the date on
which the report is issued. If none, to give a negative statement.

In the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the date to which the report refers and the date on which the report is issued which would affect substantially the results of the operations of the Company or of the Group.

8. A commentary at the date of this announcement of the competitive conditions of the

industry in which the group operates and any known factors or events that may affect
the group in the next reporting period

The Group continues to operate in a very competitive overseas environment. Moving forward, the Group will continue its intensive advertising and merchandising efforts. The second half of the year is traditionally the better selling season for the Group in the key markets of Russia, Eastern Europe and Central Asia. The Group will also step up efforts in IndoChina and China to increase its market share.

In the second half year, the Group will launch more new confectionery products to widen its range of offerings to the market and enhance its market position. The Group will continue to seek new markets for its new food business. While doing so, the Group will continue to launch more new products in its core beverage business to further strengthen its market position in its key markets.

To boost sales for the frozen food, the Group will continue to build its distribution network in the Middle East and Europe.

As the bulk of the Group's turnover comes from overseas, its profitability will continue to be affected by foreign currency flunctuations.

Barring unforeseen circumstances, the Directors expect the Group to continue its performance into the second half of the year.

9. Dividend

(d) Date payable

NIL

(e) Books closure date

NIL

(f) Any other comments relating to Paragraph 9

NIL

10.(a) Balance sheet

 

	Group(S$'000)		Company (S$'000)
	30 June 2002	31 December 2001	30 June 2002	31 December 2001
Fixed Assets	9,747	9,253	0	0
Intangible Assets	69	79	0	0
Investment in associate company	588	679	834	834
Investment in Subsidiary Companies	0	0	12,936	12,936
Current Assets	45,908	43,720	10,422	12,515
Current Liabilities	(12,178)	(12,800)	(134)	(156)
Net Current Assets	33,730	30,920	10,288	12,359
Non-Current Liabilities	(788)	(803)	0	0
	43,346	40,128	24,058	26,129
Capital & Reserves	40,472	37,920	24,058	26,129
Minority Interest	2,874	2,208	0	0
	43,346	40,128	24,058	26,129

10.(b) Cash flow statement

 

	30 June 2002	30 June 2001
	S$'000	S$'000
Cash flows from operating activities:
Profit from ordinary activities before taxation and minority interests	6,805	5,808
Adjustments For:
Amortisation of goodwill	10	10
Depreciation of fixed assets	478	360
Exchange realignment	(132)	131
Loss on disposal of fixed assets	4	64
Interest Income	(19)	(24)
Interest Expense	28	1
Capital reserve written off	(16)	0
Preliminary Expense written off	0	19
Share of result of associated company	92	70
Operating income before reinvestment in working capital	7,250	6,439
(Increase)/Decrease in receivables	(1,232)	2,093
Increase in inventories	(1,214)	(5,493)
Increase/(decrease) in payables	537	(1,403)
Cash generated from operations	5,341	1,636
Income taxes paid	(2,413)	(2,280)
Net cash generated from/(used in) operating activities	2,928	(644)
Cash flows from investing activities:
Acquisition of additional interest in a subsidiary company	0	(469)
Interest received	19	24
Purchase of shares in an associated company	0	(834)
Purchase of fixed assets	(1,023)	(1,050)
Proceeds from issuance of shares to minority shareholder of a subsidiary company	0	130
Net cash inflow from disposal of a subsidiary company	0	130
Proceeds on sales of fixed assets	4	9
Proceeds on maturity of financial asset	500	0
Net cash used in investing activities	(500)	(2,060)
Cash flows from financing activities:
Interest paid	(28)	(1)
Dividends paid to shareholders of the Company	(1,948)	(1,298)
Repayment of short term financing	(129)	0
Repayment of term loan	(42)	0
Net cash used in financing activities	(2,147)	(1,299)
Net increase/(decrease) in cash and cash equivalents	281	(4,003)
Cash and cash equivalents at beginning of the year	8,828	11,104
Cash and cash equivalents at end of the period	9,109	7,101

10.(c) Statement of changes in equity

 

	Share Capital	Share Premium	Capital Reserve	Foreign Currency Translation Reserve	Revenue Reserve	Total
	S$'000	S$'000	S$'000	S$'000	S$'000	S$'000
The Group
As at 01 July 2001	17,200	6,086	16	106	7,137	30,545
Net Profit	-	-	-	-	7,127	7,127
Exchange differences on translation of net assets of foreign subsidiaries	-	-	-	248	-	248
As at 31 December 2001	17,200	6,086	16	354	14,264	37,920
Net Profit	-	-	-	-	4,814	4,814
Dividends	-	-	-	-	(1,948)	(1,948)
Exchange differences on translation of net assets of foreign subsidiaries	-	-	-	(298)	-	(298)
Goodwill arising from acquisition of subsidiary written off	-	-	(16)	-	-	(16)
As at 30 June 2002	17,200	6,086	0	56	17,130	40,472
The Company
As at 01 July 2001	17,200	6,086	0	0	208	23,494
Net Profit/(Loss)					2,635	2,635
As at 31 December 2001	17,200	6,086	0	0	2,843	26,129
Net Profit/(Loss)	-	-	-	-	(123)	(123)
Dividends	-	-	-	-	(1,948)	(1,948)
As at 30 June 2002	17,200	6,086	0	0	772	24,058

10.(d) Explanatory notes that are material to an understanding of the information provided in

10.(a), (b) and (c) above

NIL

11. Details of any changes in the company's issued share capital

During the year, the Group granted share options under FEH Share Option Scheme to its employees. As at 30 June 2002, the unexercised share options consist of 17,720,000 ordinary shares of S$0.05 each.

12. The group's borrowings and debt securities as at the end of the financial period reported

on, and comparative figures as at the end of the most recently announced financial
statements



(a) Amount repayable in one year or less, or on demand
As at 30/06/2002		As at 31/12/2001
Secured	Unsecured	Secured	Unsecured
S$ 39,705.00	S$ 9,216.00	S$ 39,752.00	S$ 0



 

(b) Amount repayable after one year
As at 30/06/2002		As at 31/12/2001
Secured	Unsecured	Secured	Unsecured
S$ 395,329.00	S$ 28,484.00	S$ 436,833.00	S$ 0

(c) Any other comments relating to Paragraph 12

NIL

13. A statement that the same accounting polices and methods of computation are followed

in the financial statements as compared with the most recent audited annual financial
statements. Where there have been any changes or departure from the accounting policies
and methods of computation, including those required by an accounting standard, this
should be disclosed together with the reasons for the change and the effect of the change

The Company and the Group used the same accounting policies and methods of computation in the financial statement as compared with the audited financial statements for the year ended 31 December 2001.

BY ORDER OF THE BOARD

Loh Shu Chun
Company Secretary
20/08/2002