Operations Review

(Extracted from Annual Report 2023)

Financial Performance

The Group reported record revenue of US$425.7 million in FY2023 as compared to US$398.4 million in FY2022. This was mainly due to higher volumes and/or higher average selling price in all of the Group's core markets.

In the Group's Russia segment, revenue decreased by 3.5% from US$148.4 million in FY2022 to US$143.3 million in FY2023. This reduction was mainly due to the depreciation of the Russian Ruble against the US dollar. The average exchange rate was 85.4 Ruble per US dollar in FY2023 as compared to 65.8 Ruble per US dollar in FY2022. The revenue recorded in local currency terms increased by 25.2% mainly due to the combination of higher volume and higher pricing.

The Group's Ukraine, Kazakhstan and CIS segments saw an increase in revenue of 21.1% to US$110.7 million for FY2023, compared with US$91.5 million in FY2022. The increase was also driven by higher volume and higher pricing in the Group's CIS and Kazakhstan markets.

For the Group's South-East Asia segment, revenue increased by 9.6% from US$92.7 million in FY2022 to US$101.6 million in FY2023 mainly due to higher sales volumes in the Group's Vietnam market. Notably, the Group has completed its non-dairy creamer expansion in Malaysia and is expected to begin commercial production in 2024.

The revenue of the Group's South Asia segment increased by 24.1% to US$49.1 million in FY2023 from US$39.6 million in FY2022. The Group's freeze-dried coffee plant in India mainly contributed to this increase. Both the freeze-dried and spraydried coffee plants continue to operate at full production capacity

Revenue in the Group's Other segment decreased by 20.0% from US$26.2 million in FY2022 to US$21.0 million in FY2023 mainly due to the divestment of its European noncore frozen food business in FY2022.

The selling and marketing expenses in FY2023 increased by 10.2%, from US$28.7 million in FY2022 to US$31.6 million. The increase was mainly driven by higher advertising and promotional expenses. The general and administrative expenses increased to US$38.9 million in FY2023, compared to US$37.5 million. The increase was mainly due to higher manpower cost.

Excluding the one-off gain of US$15.0 million recorded in FY2022 from the disposal of a non-core asset, the Group's normalised net profit after tax increased from US$45.1 million in FY2022 to US$56.5 million in FY2023. The increase was mainly driven by higher revenue and better operating margin.

Financial Position

As at 31 December 2023, the Group's trade receivable increased by US$6.7 million to US$38.2 million. This was mainly due to the higher sales recorded by the Group.

The Group generated a cash flow of US$50.6 million from operating activities in FY2023, bringing its cash and cash equivalents to US$131.3 million as at 31 December 2023.

The Group's net asset as at 31 December 2023 was US$294.5 million compared to US$275.6 million as at 31 December 2022. The net asset value per ordinary share (excluding non-controlling interests) as at 31 December 2023 was 56.20 US cents, as compared to 51.84 US cents as at 31 December 2022.