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News Release - Food Empire Holdings Posts 32.6% Rise In Turnover And 25% Increase In Profit After Tax For Half-year 2002

Singapore, 20 August 2002 - SGX mainboard-listed Food Empire Holdings (FEH), a leading food and beverage manufacturer, has announced improved results for the six months ended 30 June 2002. Group Turnover rose a robust 32.6% to $44.3 million on the back of broad-based growth. Group Profit After Tax attributable to shareholders registered a 25.0% increase to $4.8 million compared to the corresponding six-month period in the previous financial year.

At the operating level, Earnings Before Interest, Foreign Exchange Gain/(Loss), Income Tax, Depreciation and Amortisation (EBITDA) improved 56.1% to $8.3 million.

FEH's group revenue for the year was boosted by stronger sales volume across all key markets of Russia, Eastern Europe and Central Asia. Group Profit improved on the back of higher turnover, a general reduction in cost of raw materials especially coffee and improved operational efficiencies.

Mr Tan Wang Cheow, FEH Chairman and Managing Director said: "Despite the difficult business conditions that continued into 2002, we are pleased that the Group continued to do well for the first half of this year. 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 the Group's Turnover in the first half of 2002 continued to come from international sales. Russia, a core market for the Group, contributed 59.2% of Group revenue while Eastern Europe and Central Asia contributed 26.9% in the first half of this year. Sales from Other Markets made up the balance 13.9% of Group revenue.

The Group's business in Russia registered a 27.5% jump in turnover to $26.2 million due to deeper market penetration and more aggressive marketing and advertising. Profit before Tax and Interest (PBIT) rose 5.3% to $5.3 million during the period under review.

Combined sales in Eastern Europe and Central Asia grew 19.5% to 11.9 million while PBIT increased 30.2% to $1.7 million. 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 $5.2 million. Beverage products made up 88.3% of Group turnover, a reduction from 95.0% previously following an increase in sales from the other products division.

To grow the business, Food Empire 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 zesty fruit flavours - to boost demand for its confectionery.

For the six months ended 30 June 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.

Outlook

Commenting on the rest of this year, Mr 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 second half of the year, 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 of Directors expects the Group to continue its performance in the second half of FY2002.

About Food Empire Holdings

Listed on the main board of the Singapore Exchange, Food Empire Holdings is a leading food and beverage company that manufactures and market instant beverage products, frozen finger food and confectionery.

Food Empire Holdings' products are exported to over 30 countries in markets such as Russia, Eastern Europe, Central Asia, China, Indochina, Australia and the US. The Group has 11 offices (representative and liaison) in 10 countries in the UK, Belgium, Russia, Ukraine, Kazakhstan, Poland, UAE, Turkey, China and Vietnam. It also has a wholesale business that trades in frozen seafood.

The Group's core products include a wide variety of regular and flavoured coffee mixes and cappuccinos, instant chocolate, instant breakfast cereal and flavoured fruit teas. Enhancing the variety are butterscotch, coffee, cola and chewy candies and a delectable assortment of frozen Asian finger food made with no MSG, preservatives and colouring.

Food Empire has more than 90 types of products under its own brands - MacCoffee, Klassno, Temasek Royal, Express, FesAroma, Cosenza, B?same, OrienBites and MacCandy.



Issued For And On Behalf of Food Empire Holdings By:
The Blue Edge Pte Ltd
(Business communications consultancy)

For more information please call:
Ms Jenny Lam
Director
The Blue Edge Pte Ltd

Tel: 65-7383845
HP: 65-97696889
bizmail@theblueedge.com
Submitted by Loh Shu Chun, Company Secretary on 20/08/2002 to the SGX