News

Second Quarter Financial Statement And Dividend Announcement For The Period Ended 30 June 2004

BackAug 10, 2004
PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3),
        HALF-YEAR AND FULL YEAR RESULTS


1(a) An income statement (for the group) together with a comparative statement for the
      corresponding period of the immediately preceding financial year.
      Group
      Group
      %
      Increase/
      (Decrease)
      Group
      Group
      %
      Increase/
      (Decrease)
      (S$'000)
      (S$'000)
      (S$'000)
      (S$'000)
      Apr- Jun
      2004
      Apr - Jun
      2003
      Jan - Jun
      2004
      Jan - Jun
      2003
      Revenue
      34,981
      28,755
      21.7
      72,006
      58,142
      23.8
      Costs and expenses
      Changes in inventories of finished goods
      5,903
      919
      ) 26.6
      4,714
      1,260
      ) 26.6
      Raw materials and consumables used
      (22,876)
      (14,322)
      )
      (39,681)
      (28,879)
      )
      Staff costs
      (3,329)
      (2,975)
      11.9
      (6,524)
      (5,878)
      11.0
      Depreciation and amortisation expenses
      (387)
      (360)
      7.5
      (758)
      (671)
      13.0
      Foreign exchange gain/(loss)
      727
      37
      NM
      (25)
      (37)
      (32.4)
      Other operating expenses (Note 1)
      (10,059)
      (10,469)
      (3.9)
      (18,946)
      (17,972)
      5.4
      Other income/(expenses)
      26
      (113)
      NM
      102
      23
      NM
      Total costs and expenses
      (29,995)
      (27,283)
      9.9
      (61,118)
      (52,154)
      17.2
      Profit from operating activities
      4,986
      1,472
      238.7
      10,888
      5,988
      81.8
      Finance costs
      -
      (30)
      NM
      -
      (35)
      NM
      Share of profit/(loss) of associated companies
      6
      (42)
      NM
      (30)
      (95)
      (68.4)
      Profit from ordinary activities before taxation and minority interests
      4,992
      1,400
      256.6
      10,858
      5,858
      85.4
      Taxation
      (1,113)
      (279)
      298.9
      (2,454)
      (1,304)
      88.2
      Minority interests, net of taxation
      (709)
      (319)
      122.3
      (1,296)
      (830)
      56.1
      Net profit for the period
      3,170
      802
      295.3
      7,108
      3,724
      90.9

      NM- Not meaningful

      Note 1: Included in other operating expenses is provision for doubtful debts. Details are shown below:
      Group
      Group
      Group
      Group
      (S$'000)
      (S$'000)
      (S$'000)
      (S$'000)
      Apr- Jun
      2004
      Apr - Jun
      2003
      Jan - Jun
      2004
      Jan - Jun
      2003
      Provision for doubtful debts
      230
      102
      930
      479
1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement
      as at the end of the immediately preceding financial year.
      Group
      Group
      Company
      Company
      30/06/2004
      31/12/2003
      30/06/2004
      31/12/2003
      (S$'000)
      (S$'000)
      (S$'000)
      (S$'000)
      Assets Less Liabilities
      Non-Current Assets
      Fixed assets
      13,158
      13,459
      -
      -
      Investments in subsidiary companies
      -
      -
      12,519
      12,519
      Investment in associated companies
      1,297
      1,142
      1,082
      1,082
      Deferred tax assets
      912
      922
      -
      -
      Intangible asset
      29
      39
      -
      -
      15,396
      15,562
      13,601
      13,601
      Current Assets
      Cash and bank balances
      12,572
      11,825
      327
      30
      Trade receivables
      20,256
      20,591
      -
      -
      Prepayments, other deposits and other receivables
      5,840
      2,370
      5
      16
      Amounts due from subsidiary companies (non-trade)
      -
      -
      14,854
      18,118
      Amount due from an associated company (non-trade)
      459
      188
      460
      188
      Inventories
      28,459
      23,633
      -
      -
      67,586
      58,607
      15,646
      18,352
      Current Liabilities
      Trade payables
      (9,480)
      (7,920)
      -
      -
      Other payables
      (5,247)
      (3,379)
      (193)
      (234)
      Amount due to an associated company (trade)
      -
      (37)
      -
      -
      Provision for taxation
      (3,073)
      (2,045)
      -
      -
      (17,800)
      (13,381)
      (193)
      (234)
      Net Current Assets
      49,786
      45,226
      15,453
      18,118
      Non-Current Liabilities
      Deferred tax liabilities
      (470)
      (509)
      -
      -
      (470)
      (509)
      -
      -
      Net Assets
      64,712
      60,279
      29,054
      31,719
      Equity
      Share capital
      17,437
      17,200
      17,437
      17,200
      Reserves
      44,030
      39,802
      11,617
      14,519
      61,467
      57,002
      29,054
      31,719
      Minority interests
      3,245
      3,277
      -
      -
      64,712
      60,279
      29,054
      31,719


1(b)(ii) Aggregate amount of group's borrowings and debt securities.
      Amount repayable in one year or less, or on demand
      As at 30/06/2004
      As at 31/12/2003
      Secured
      Unsecured
      Secured
      Unsecured
      (S$'000)
      0
      (S$'000)
      0
      (S$'000)
      0
      (S$'000)
      0


      Amount repayable after one year
      As at 30/06/2004
      As at 31/12/2003
      Secured
      Unsecured
      Secured
      Unsecured
      (S$'000)
      0
      (S$'000)
      0
      (S$'000)
      0
      (S$'000)
      0


      Details of any collateral

      NIL


1(c) A cash flow statement (for the group), together with a comparative statement for
      the corresponding period of the immediately preceding financial year.
      3 months ended
      30 Jun
      2004
      3 months ended
      30 Jun
      2003
      6 months ended
      30 Jun 2004
      6 months ended
      30 Jun
      2003
      (S$'000)
      (S$'000)
      (S$'000)
      (S$'000)
      Cash flows from operating activities:
      Profit from ordinary activities before taxation and minority interests
      4,992
      1,400
      10,858
      5,858
      Adjustments for:
      Amortisation of goodwill
      5
      5
      10
      10
      Depreciation of fixed assets
      382
      355
      748
      661
      Exchange realignment
      178
      (37)
      80
      40
      Loss/(Gain) on disposal of fixed assets
      -
      108
      (9)
      241
      Interest income
      (5)
      (2)
      (6)
      (3)
      Interest expenses
      -
      30
      -
      35
      Share of (profit)/loss of associated companies
      (6)
      42
      30
      95
      Operating income before reinvestment in working capital
      5,546
      1,901
      11,711
      6,937
      (Increase)/decrease in receivables
      (3,172)
      211
      (3,135)
      (1,862)
      Increase in inventories
      (6,395)
      (2,523)
      (4,826)
      (2,877)
      Increase in payables
      4,665
      3,741
      3,391
      2,273
      Cash generated from operations
      644
      3,330
      7,141
      4,471
      Income taxes paid
      (789)
      (850)
      (1,457)
      (1,693)
      Net cash (used in)/generated from operating activities
      (145)
      2,480
      5,684
      2,778
      Cash flows from investing activities:
      Interest income received
      5
      2
      6
      3
      Purchase of fixed assets
      (258)
      (840)
      (419)
      (2,309)
      Proceeds from sale of fixed assets
      -
      -
      9
      -
      Investment in an associated company
      (254)
      -
      (254)
      -
      Net cash used in investing activities
      (507)
      (838)
      (658)
      (2,306)
      Cash flows from financing activities:
      Interest expenses paid
      -
      (30)
      -
      (35)
      Dividends paid to shareholders of the Company
      (3,467)
      (3,354)
      (3,467)
      (3,354)
      Dividends paid to minority shareholders of subsidiary companies
      (944)
      -
      (1,351)
      -
      Repayment of interest-bearing borrowings
      -
      (2)
      -
      (5)
      Loan to an associated company
      (141)
      -
      (267)
      -
      Proceeds from issuance of shares
      448
      -
      806
      -
      Net cash used in financing acitivities
      (4,104)
      (3,386)
      (4,279)
      (3,394)
      Net (decrease)/increase in cash and cash equivalents
      (4,756)
      (1,744)
      747
      (2,922)
      Cash and cash equivalents at beginning of the period
      17,328
      6,944
      11,825
      8,122
      Cash and cash equivalents at end of the period
      12,572
      5,200
      12,572
      5,200


1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or
      (ii) changes in equity other than those arising from capitalisation issues and
      distributions to shareholders, together with a comparative statement for the
      corresponding period of the immediately preceding financial year.
      Share Capital
      Share Premium
      Foreign Currency Translation Reserve
      Revenue Reserve
      Total
      (S$'000)
      (S$'000)
      (S$'000)
      (S$'000)
      (S$'000)
      The Group
      Balance as at 01/01/2003
      17,200
      6,086
      (53)
      27,109
      50,342
      Net profit for the period
      -
      -
      -
      2,922
      2,922
      Movements during the period
      -
      -
      109
      -
      109
      Balance as at 31/03/2003
      17,200
      6,086
      56
      30,031
      53,373
      Net profit for the period
      -
      -
      -
      802
      802
      Movements during the period
      -
      -
      (34)
      -
      (34)
      Dividends paid during the period
      -
      -
      -
      (3,354)
      (3,354)
      Balance as at 30/06/2003
      17,200
      6,086
      22
      27,479
      50,787
      Balance as at 01/01/2004
      17,200
      6,086
      (202)
      33,918
      57,002
      Net profit for the period
      -
      -
      -
      3,938
      3,938
      Movements during the period
      -
      -
      (119)
      -
      (119)
      Issuance of ordinary shares
      105
      253
      -
      -
      358
      Balance as at 31/03/2004
      17,305
      6,339
      (321)
      37,856
      61,179
      Net profit for the period
      -
      -
      -
      3,170
      3,170
      Movements during the period
      -
      -
      137
      -
      137
      Issuance of ordinary shares
      132
      316
      -
      -
      448
      Dividends paid during the period
      -
      -
      -
      (3,467)
      (3,467)
      Balance as at 30/06/2004
      17,437
      6,655
      (184)
      37,559
      61,467
      The Company
      Balance as at 01/01/2003
      17,200
      6,086
      -
      12,057
      35,343
      Net profit for the period
      -
      -
      -
      66
      66
      Balance as at 31/03/2003
      17,200
      6,086
      -
      12,123
      35,409
      Net profit for the period
      -
      -
      -
      2
      2
      Dividends paid during the period
      -
      -
      -
      (3,354)
      (3,354)
      Balance as at 30/06/2003
      17,200
      6,086
      -
      8,771
      32,057
      Balance as at 01/01/2004
      17,200
      6,086
      -
      8,433
      31,719
      Net (loss) for the period
      -
      -
      -
      (15)
      (15)
      Issuance of ordinary shares
      105
      253
      -
      -
      358
      Balance as at 31/03/2004
      17,305
      6,339
      -
      8,418
      32,062
      Net profit for the period
      -
      -
      -
      11
      11
      Issuance of ordinary shares
      132
      316
      -
      -
      448
      Dividends paid during the period
      -
      -
      -
      (3,467)
      (3,467)
      Balance as at 30/06/2004
      17,437
      6,655
      -
      4,962
      29,054


1(d)(ii) Details of any changes in the company's share capital arising from rights issue,
      bonus issue, share buy-backs, exercise of share options or warrants, conversion of
      other issues of equity securities, issue of shares for cash or as consideration for
      acquisition or for any other purpose since the end of the previous period reported
      on. State also the number of shares that may be issued on conversion of all the
      outstanding convertibles as at the end of the current financial period reported on
      and as at the end of the corresponding period of the immediately preceding
      financial year.
      The issued and paid-up capital of the Company increased from S$17,305,500 as at 31 March 2004 to S$17,437,000 as at 30 June 2004. The increase was due to 131,500 new ordinary shares of S$0.05 each allotted and issued pursuant to the exercise of options granted under the Food Empire Share Option Scheme (the "Option Scheme").

      As at 30 June 2004, options to subscribe for a total of 25,650,000 ordinary shares were outstanding under the Option Scheme. As at 30 June 2003, options to subscribe for a total of 17,785,000 ordinary shares were outstanding under the Option Scheme.
      Balance
      as at
      1 Apr 2004
      No of options granted during the period
      No of options lapsed during the period
      No of options exercised during the period
      Balance
      as at
      30 Jun 2004
      Exercise Price per share ($)
      Exercise Period
      2002 Options
      13,955,000
      -
      -
      (2,630,000)
      11,325,000
      0.17
      		 14 March 2004 to 13 March 2012
      2002 Options
      800,000
      -
      -
      -
      800,000
      0.17
      		 14 March 2004 to 13 March 2007
      2003 Options
      500,000
      -
      -
      -
      500,000
      0.27
      		 04 June 2005 to 13 March 2012
      2004 Options
      -
      400,000
      -
      -
      400,000
      0.275
      		 25 May 2004 to 24 May 2009
      2004 Options
      -
      12,625,000
      -
      -
      12,625,000
      0.275
      		 25 May 2004 to 24 May 2014
      15,255,000
      13,025,000
      -
      (2,630,000)
      25,650,000
2. Whether the figures have been audited or reviewed and in accordance with
      which auditing standard or practice.
      The figures are unaudited and were not reviewed by the auditors.


3. Where the figures have been audited or reviewed, the auditors' report (including
      any qualifications or emphasis of a matter).
      Not applicable.


4. Whether the same accounting policies and methods of computation as in the
      issuer's most recently audited annual financial statements have been applied.
      The Group has applied the same accounting policies and methods of computation in the financial statements for the current financial period compared with the audited financial statements as at 31 December 2003.


5. If there are any changes in the accounting policies and methods of computation,
      including any required by an accounting standard, what has changed, as well as
      the reasons for, and the effect of, the change.
      Not applicable.


6. Earnings per ordinary share of the group for the current financial period reported
      on and the corresponding period of the immediately preceding financial year,
      after deducting any provision for preference dividends.

      Group Figures
      Group Figures
      Group Figures
      Group Figures
      3 months ended
      3 months ended
      6 months ended
      6 months ended
      30/06/2004
      30/06/2003
      30/06/2004
      30/06/2003
      Earnings per share
      (i) Based on existing issued share capital (cents)
      0.91
      0.23
      2.05
      1.08
      (ii) On a fully diluted basis (cents)
      0.89
      0.23
      2.01
      1.06

      Weighted average number of shares table
      3 months ended
      3 months ended
      6 months ended
      6 months ended
      30/06/2004
      30/06/2003
      30/06/2004
      30/06/2003
      Weighted average number of shares for calculation of basic EPS
      347,649,451
      344,000,000
      345,973,517
      344,000,000
      Weighted average number of shares for calculation of diluted EPS
      355,748,141
      351,870,645
      354,360,579
      351,870,645


7. Net asset value (for the issuer and group) per ordinary share based on issued share
      capital of the issuer at the end of the:-

      (a) current financial period reported on; and
      (b) immediately preceding financial year.

      Group
      Group
      Company
      Company
      30/06/2004
      31/12/2003
      30/06/2004
      31/12/2003
      Net asset value per ordinary share (cents)
      17.63
      16.57
      8.33
      9.22
8. A review of the performance of the group, to the extent necessary for a reasonable
      understanding of the group's business. It must include a discussion of the
      following:-

      (a) any significant factors that affected the turnover, costs, and earnings of the
      group for the current financial period reported on, including (where applicable)
      seasonal or cyclical factors; and

      (b) any material factors that affected the cash flow, working capital, assets or
      liabilities of the group during the current financial period reported on.

      Second quarter 2004 ('2Q04') versus second quarter 2003 ('2Q03')

      For the quarter ended 30 June 2004, Group Revenue rose 21.7% to S$35.0 million and Group Net Profit after Tax grew 295.3% to S$3.2 million. The sterling performance was attributable mainly to stronger sales.

      Revenue

      Group Revenue increased across all geographical segments with Russia contributing 60.4% followed by Eastern Europe and Central Asia with 31.8%. Revenue from Other Markets made up the balance 7.8%.

      Table: Geographical Analysis
      2Q04
      (S$'000)
      2Q03
      (S$'000)
      % increase/ (decrease)
      Russia
      21,129
      16,610
      27.2
      Eastern Europe & Central Asia
      11,112
      9,863
      12.7
      Others
      2,740
      2,282
      20.1
      Total
      34,981
      28,755
      21.7

      Revenue from Russia rose 27.2% to S$21.1 million as a result of intensified promotional activities. Eastern Europe and Central Asia sales increased 12.7% to S$11.1 million on the back of higher brand awareness and sales of core coffee products. Other Markets revenue grew 20.1% to S$2.7 million following higher sales in the Middle East market.


      Table: Product Analysis
      2Q04
      (S$'000)
      2Q03
      (S$'000)
      % increase/ (decrease)
      Beverages
      31,868
      25,444
      25.2
      Others
      3,113
      3,311
      (6.0)
      Total
      34,981
      28,755
      21.7


      The Beverage segment remained the core contributor with 91.1% to Group Revenue.

      Revenue from Beverage segment increased 25.2% to S$31.9 million due largely to stronger sales for coffee-based products. The Non-beverage segment dipped 6.0% to S$3.1 million in Q2 due mainly to the cessation of frozen seafood trading.

      Net Profit After Tax

      Net Profit After Tax ('PAT') increased 295.3% to S$3.2 million due mainly to higher sales. Advertising and promotions expenses, wages and overseas office expenses were also kept at moderate levels in Q2 this year compared to 2Q03. The rise in cost of some raw materials was offset by better control over logistics expenses.

      The Group recorded an exchange gain of S$0.7 million compared to a gain of S$37,000 in the previous year as a result of a stronger US dollar as at 30 June 2004.

      Cash Flow Statement

      The Group's Net Cash position decreased by S$4.8 million to S$12.6 million largely due to the payout of dividends, and higher inventory levels to support the promotional activities. The increase in trade receivables was in line with the revenue growth.

      First half 2004 ('1H04') versus first half 2003 ('1H03')

      Net Profit After Tax for 1H04 increased 90.9% to S$7.1 million on the back of revenue growth of 23.8% to S$72.0 million.


      Table: Geographical Analysis
      1H04
      (S$'000)
      1H03
      (S$'000)
      % increase/ (decrease)
      Russia
      43,356
      34,609
      25.3
      Eastern Europe & Central Asia
      23,340
      18,039
      29.4
      Others
      5,310
      5,494
      (3.3)
      Total
      72,006
      58,142
      23.8

      The Group recorded sales growth in core market segments, led by Russia with 60.2% contribution to Group Revenue followed by Eastern Europe and Central Asia with 32.4% contribution. Other markets made up the balance of 7.4%.


      Table: Product Analysis
      1H04
      (S$'000)
      1H03
      (S$'000)
      % increase/ (decrease)
      Beverages
      65,738
      51,923
      26.6
      Others
      6,268
      6,219
      0.8
      Total
      72,006
      58,142
      23.8

      In terms of product segments, Revenue increased 26.6% and 0.8% respectively in both Beverage and Non-beverage segments for 1H04. The Beverage segment remained the Group's core business with a 91.3% contribution to Group Revenue.


9. Where a forecast, or a prospect statement, has been previously disclosed to
      shareholders, any variance between it and the actual results.
      Not applicable.


10. A commentary at the date of the announcement of the significant trends and
      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
      and the next 12 months.
      The Group expects market conditions to remain competitive and foreign currency fluctuations will remain a key consideration. The Group will continue to invest in brand building and distribution network expansion to improve its market share.


11. Dividend
      (a) Current Financial Period Reported On

      Any dividend declared for the current financial period reported on? None
      (b) Corresponding Period of the Immediately Preceding Financial Year

      Any dividend declared for the corresponding period of the immediately preceding financial year? None

      (c) Date payable
        Not applicable.


      (d) Books closure date
        Not applicable.


12. If no dividend has been declared/recommended, a statement to that effect.
      Not applicable



PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT
        (This part is not applicable to Q1, Q2, Q3 or Half Year Results)


13. Segmented revenue and results for business or geographical segments (of the
      group) in the form presented in the issuer's most recently audited annual financial
      statements, with comparative information for the immediately preceding year.
      Not applicable.


14. In the review of performance, the factors leading to any material changes in
      contributions to turnover and earnings by the business or geographical segments.
      Not applicable.


15. A breakdown of sales.
      Not applicable.


16. A breakdown of the total annual dividend (in dollar value) for the issuer's latest
      full year and its previous full year.

      Total Annual Dividend (Refer to Para 16 of Appendix 7.2 for the required details)
      Latest Full Year (S$)
      Previous Full Year (S$)
      Ordinary
      0
      0
      Preference
      0
      0
      Total:
      0
      0




BY ORDER OF THE BOARD

Tan San-Ju
Company Secretary
10/08/2004