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

HALF-YEAR AND FULL YEAR RESULTS

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

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

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

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

(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

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

which auditing standard or practice.

The figures are unaudited and were not reviewed by the auditors.

any qualifications or emphasis of a matter).

Not applicable.

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.

including any required by an accounting standard, what has changed, as well as
the reasons for, and the effect of, the change.

Not applicable.

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

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

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.

shareholders, any variance between it and the actual results.

Not applicable.

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.

(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.

Not applicable

(This part is not applicable to Q1, Q2, Q3 or Half Year Results)

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.

contributions to turnover and earnings by the business or geographical segments.

Not applicable.

Not applicable.

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