This printed article is located at https://foodempire.listedcompany.com/news.html

News

3rd Quarter 2003 Financial Statement Announcement

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 (S$'000)	Group (S$'000)	% Increase/ (Decrease)	Group (S$'000)	Group (S$'000)	% Increase/ (Decrease)
	July-Sept 2003	July-Sept 2002		Jan-Sept 2003	Jan-Sept 2002
Revenue	36,081	28,646	25.95	94,223	72,959	29.15
Costs and expenses
Changes in inventories in finished goods	(1,231)	676	NM	29	3,054	(99.05)
Raw materials and consumables used (Note 1)	(16,131)	(14,083)	14.54	(45,010)	(37,444)	20.21
Depreciation and amortisation expenses	(380)	(267)	42.32	(1,051)	(755)	39.21
Foreign exchange gain/(loss)	(400)	(424)	(5.66)	(437)	(1,331)	(67.17)
Other operating expenses	(15,033)	(9,584)	56.86	(38,883)	(24,664)	57.65
Other income	55	58	(5.17)	78	128	(39.06)
Total costs and expenses	(33,120)	(23,624)	40.20	(85,274)	(61,012)	39.77
Profit from operating activities	2,961	5,022	(41.04)	8,949	11,947	(25.09)
Finance costs	(43)	(12)	NM	(78)	(40)	95.00
Share of loss of associated company	(2)	(102)	(98.04)	(97)	(194)	(50.00)
Profit before taxation	2,916	4,908	(40.59)	8,774	11,713	(25.09)
Taxation (Note 2)	(448)	(1,292)	(65.33)	(1,752)	(2,667)	(34.31)
Minority interests, net of taxation	(319)	(381)	(16.27)	(1,149)	(997)	15.25
Profit after taxation and minority interests	2,149	3,235	(33.57)	5,873	8,049	(27.03)

NM- Not meaningful

Note 1: The movements in raw materials and consumables used are proportionately the same as the increase in revenue due to the changes in inventories of finished goods.

Note 2: The change in effective tax rate for this quarter is due to tax incentives enjoyed by a subsidiary company which was only adjusted in the current quarter.


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
	30/09/2003 (S$'000)	31/12/2002 (S$'000)	30/09/2003 (S$'000)	31/12/2002 (S$'000)
Assets Less Liabilities
Non Current Assets
Fixed assets (Note 1)	14,084	11,994	-	-
Investments in subsidiary companies	-	-	12,676	12,676
Investment in associated company (Note 2)	1,165	448	1,242	428
Deferred tax assets	288	218	-	-
Intangible assets	44	59	-	-
	15,581	12,719	13,918	13,104
Current assets
Cash and bank balances	7,076	8,122	27	47
Trade receivables (Note 3)	19,281	15,880	-	-
Prepayments, other deposits and other receivables	4,628	3,840	111	108
Amount due from subsidiary companies	-	-	18,071	21,306
Amount due from associated company	191	991	191	991
Inventories	27,800	29,221	-	-
	58,976	58,054	18,400	22,452
Current liabilities
Trade payables	(7,760)	(10,619)	-	-
Bills Payable	(2,510)	(167)	-	-
Other payables (Note 3)	(6,314)	(4,210)	(212)	(211)
Finance lease liabilities	-	(7)	-	-
Provision for taxation	(1,738)	(2,599)	(32)	(2)
	(18,322)	(17,602)	(244)	(213)
Net current assets	40,654	40,452	18,156	22,239
Non-Current Liabilities
Finance lease liabilities	-	(28)	-	-
Deferred tax liabilities	(306)	(306)	-	-
	(306)	(334)	-	-
Net assets	55,929	52,837	32,074	35,343
Equity
Share capital	17,200	17,200	17,200	17,200
Reserves	35,631	33,142	14,874	18,143
	52,831	50,342	32,074	35,343
Minority interest	3,098	2,495	-	-
	55,929	52,837	32,074	35,343

Notes:

1. The increase in fixed assets was a result of investment in machinery and expansion of factories.
2. Investment in associated company increased as a result of an increase in its equity.
3. The increase in trade receivables and other payables was in line with the increase in revenue.


1(b)(ii) Aggregate amount of group's borrowings and debt securities

Amount repayable in one year or less, or on demand

As at 30/09/2003

As at 31/12/2002

Secured	Unsecured	Secured	Unsecured
(S$'000) 0	(S$'000) 2,510	(S$'000) 0	(S$'000) 174


Amount repayable after one year


As at 30/09/2003

As at 31/12/2002

Secured	Unsecured	Secured	Unsecured
(S$'000) 0	(S$'000) 0	(S$'000) 0	(S$'000) 28


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 mths ended 30 Sept 2003	3 mths ended 30 Sept 2002	9 mths ended 30 Sept 2003	9 mths ended 30 Sept 2002
	(S$'000)	(S$'000)	(S$'000)	(S$'000)
Cash flows from operating activities:
Profit from ordinary activities before taxation and minority interests	2,916	4,908	8,774	11,713
Adjustments for:
Amortisation of goodwill	5	5	15	16
Depreciation of fixed assets	375	262	1,036	739
Exchange realignment	(80)	30	(40)	(101)
Loss on disposal of fixed assets	4	5	245	9
Interest income	-	(10)	(3)	(30)
Interest expense	43	12	78	40
Share of loss of associated company	2	102	97	194
Capital reserve written off	-	-	-	(16)
Operating income before reinvestment in working capital	3,265	5,314	10,202	12,564
Increase in receivables	(2,326)	(2,551)	(4,188)	(3,782)
Decrease/ (Increase) in inventories	4,298	318	1,421	(896)
(Decrease)/ Increase in payables	(687)	776	1,587	1,313
Cash generated from operations	4,550	3,857	9,022	9,199
Income taxes paid	(994)	(1,817)	(2,688)	(4,231)
Net cash generated from operating activities	3,556	2,040	6,334	4,968
Cash flows from investing activities
Interest received	-	10	3	30
Purchase of fixed assets	(1,129)	(540)	(3,469)	(1,563)
Proceeds on maturity of other financial asset	-	-	-	500
Proceeds from sale of fixed assets	121	10	121	14
Dividends paid to minority shareholder of subsidiary company	(537)	-	(537)	-
Loan to associated company	-	(193)	-	(193)
Net cash used in investing activities	(1,545)	(713)	(3,882)	(1,212)
Cash flows from financing activities
Interest paid	(43)	(12)	(78)	(40)
Dividend paid to shareholders of the Company	-	-	(3,354)	(1,948)
Repayment of short term financing	(92)	(284)	(66)	(414)
Repayment of term loan	-	(6)	-	(48)
Net cash used in financing acitivities	(135)	(302)	(3,498)	(2,450)
Net increase/ (decrease) in cash and cash equivalents	1,876	1,025	(1,046)	1,306
Cash and cash equivalents at beginning of the period	5,200	9,109	8,122	8,828
Cash and cash equivalents at end of the period	7,076	10,134	7,076	10,134

 

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	Capital Reserve	Foreign Currency Translation Reserve	Revenue Reserve	Total
	(S$'000)	(S$'000)	(S$'000)	(S$'000)	(S$'000)	(S$'000)
The Group
Balance as at 01/01/2002	17,200	6,086	16	355	14,263	37,920
Net profit for the period	-	-	-	-	2,229	2,229
Movements during the period	-	-	(16)	(34)	-	(50)
Balance as at 31/03/2002	17,200	6,086	-	321	16,492	40,099
Net profit for the period	-	-	-	-	2,585	2,585
Movements during the period	-	-	-	(264)	-	(264)
Dividends paid during the period	-	-	-	-	(1,948)	(1,948)
Balance as at 30/06/2002	17,200	6,086	-	57	17,129	40,472
Net profit for the period	-	-	-	-	3,235	3,235
Movements during the period	-	-	-	66	-	66
Balance as at 30/09/2002	17,200	6,086	-	123	20,364	43,773
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
Net profit for the period	-	-	-	-	2,149	2,149
Movements during the period	-	-	-	(105)	-	(105)
Balance as at 30/09/2003	17,200	6,086	-	(83)	29,628	52,831
The Company
Balance as at 01/01/2002	17,200	6,086	-	-	2,843	26,129
Net (loss) for the period	-	-	-	-	(9)	(9)
Balance as at 31/03/2002	17,200	6,086	-	-	2,834	26,120
Net (loss) for the period	-	-	-	-	(114)	(114)
Dividends paid during the period	-	-	-	-	(1,948)	(1,948)
Balance as at 30/06/2002	17,200	6,086	-	-	772	24,058
Net (loss) for the period	-	-	-	-	(26)	(26)
Balance as at 30/09/2002	17,200	6,086	-	-	746	24,032
Balance as at 1/1/2003	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
Net profit for the period	-	-	-	-	17	17
Balance as at 30/09/2003	17,200	6,086	-	-	8,788	32,074

 

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 or 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

There was no change in the Company's share capital during the period under review. As at 30 September 2003, there were unexercised options for 17,435,000 of unissued ordinary shares of the Company under the Food Empire Share Option Scheme. (30/09/02: 17,720,000)


2. Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore Standard on Auditing 910 (Engagements to Review Financial Statements), or an equivalent standard)

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 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 31st December 2002.


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 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 mths ended 30/09/2003	3 mths ended 30/09/2002	9 mths ended 30/09/2003	9 mths ended 30/09/2002
Earnings per share
(i) Based on existing issued share capital (cents)	0.62	0.94	1.71	2.34
(ii) On a fully diluted basis (cents)	0.61	0.92	1.66	2.30

Earnings per ordinary share on existing issued share capital is computed based on weighted average number of 344,000,000 ordinary shares during the period. (30/09/2002:344,000,000)

Earnings per ordinary share on a fully diluted basis is computed based on weighted average number of 352,823,714 ordinary shares during the period adjusted to assume conversion of all potential dilution. (30/09/2002:350,562,963)


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 period reported on and (b) immediately preceding financial year

	Group	Group	Company	Company
	30/09/2003	31/12/2002	30/09/2003	31/12/2002
Net asset backing per ordinary share (cents)	15.36	14.63	9.32	10.27

 

8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. The review must discuss 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. It must also discuss any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on

Third quarter 2003 ('3Q03') versus third quarter 2002 ('3Q02')

Group Revenue increased by S$7.5 million or 26.0% to S$36.1 million in 3Q03, as compared to the corresponding period last year of S$28.6 million. Profit before Taxation declined by 40.6% to S$2.9 million and Profit after Taxation and Minority Interests fell by 33.6% to S$2.1 million as compared to 3Q02.

The Group's net cash position increased by S$1.9 million to S$7.1 million in 3Q03. Net cash generated from operating activities increased to S$3.6 million mainly due to a reduction in inventory level. Cash outflow of S$1.5 million in the Group's investment activities was largely used for the purchase of new machineries and the payment of dividend to minority shareholder of a subsidiary company.

Revenue

The increase in Group Revenue in 3Q03 was due to stronger sales in key market segments in Russia, Eastern Europe and Central Asia. Russia contributed 56.8% to Group Revenue followed by Eastern Europe and Central Asia with 38.1%. Other Markets contributed to the remaining 5.1% of Group Revenue.

Revenue from Russia grew 29.4% or S$4.7 million to S$20.5 million in 3Q03 as compared to 3Q02. This growth was mainly due to increased sales for core brands as a result of increased brand awareness through nation-wide and region-wide advertising and promotion ("A&P") programmes.

Eastern Europe and Central Asia recorded S$13.8 million in revenue, up 43.5% or S$4.2 million from the same period last year due to heightened brand awareness through extensive A&P programmes.

Revenue from Other Markets fell by 43.0% or S$1.4 million to S$1.8 million in 3Q03 largely due to the cessation of frozen seafood trading under a subsidiary.

In terms of product segments, revenue from Beverage product segment grew 30.9% to S$33.4 million while Non-Beverage product segment dipped 13.9% to S$2.7 million. The Beverage product segment remained as the Group's core business contributing 92.5% to Group Revenue.

Profit Before Taxation

The decrease in Profit before Taxation was due largely to an increase in Other Operating Expenses by 56.9% or S$5.4 million to S$15.0 million. The bulk of the operating expenses was for higher A&P expenditure and overseas operating expenses as a result of the Group's strategic move to gear up in an increasingly competitive business environment. Others include expenses incurred on the launch of new products and higher logistics costs incurred in Russia and Ukraine.

Nine months ended September 2003 ("Sep 03") versus nine months ended September 2002 ("Sep 02")

Revenue for the nine months ended Sep 03 grew 29.2% or S$21.2 million to S$94.2 million as compared to the corresponding period last year of S$73.0 million. Profit before Taxation fell by 25.1% to S$8.8 million as compared to nine months ended Sep 02 and Profit after Taxation and Minority Interests declined 27.0% to S$5.9 million. Profit after Taxation and Minority Interests was affected by tighter gross profit margins and higher operating expenses.

The Group's key markets of Russia contributed 58.4% whilst Eastern Europe and Central Asia contributed 33.8% to Group Revenue. Other Markets made up the balance of 7.8%. Revenue for Russia increased by 31.0% whilst revenue for Eastern Europe and Central Asia increased by 47.8%.

Revenue for Beverage product segment increased by 32.0% and Non-Beverage product segment grew 7.1%. The Beverage product segment remained the Group's core business contributing 90.5% to Group Revenue.

The Group's flagship products such as MacCoffee 3-in-1 continued to perform well. The Group continued to invest in the development and marketing of new products which it views as a necessary strategy to strengthen its portfolio and longer-term growth. New product launches will incur investment costs in the initial years and will require a gestation period to build market demand and profitability.

The Group's net cash position for the nine-month period decreased by S$1.0 million to S$7.1 million. The funds were used mainly for dividends, new equipment, expansion of factories and other operating activities.


9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results

The results are in line with the prospect statement made in the announcement on 2Q03 results.


10. A commentary at the date of the 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 and the next 12 months

The Group operates in increasingly competitive markets and will continue its growth strategy to expand its market share. It will reinforce its core markets by strengthening overseas infrastructure, distribution network and brand building efforts. Advertising and promotions activities have also been stepped up to promote new products and to bolster overall sales during the traditional peak season.

Overseas operating expenses and A&P expenditure will place some short-term pressure on profit margins. The Group will endeavor to balance strategic growth with cost management. Foreign currency fluctuations will also continue to be a consideration as the bulk of the Group's turnover comes from overseas.


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

No dividend is declared/recommended for the period under review.

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

<Place tabular results and/or notes here>


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


15. A breakdown of sales

<Refer to Para 15 of Appendix 7.2 for the required details. Place tabular results and/or notes here>


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$'000)	Previous Full Year (S$'000)
Ordinary	0	0
Preference	0	0
Total:	0	0

 
 

BY ORDER OF THE BOARD

Yvonne Choo
Company Secretary
11/11/2003