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Press Release - Food Empire Achieves 3rd Consecutive Year Of Double-digit Growth Turnover Up 33% & Net Profit Rises 35% In Fy2002

Singapore, 25 February 2003 - SGX mainboard-listed Food Empire Holdings (FEH), a leading food and beverage manufacturer, is pleased to announce that it has achieved its third consecutive year of double-digit growth in Group Turnover and Group Profit After Tax for the year ended 31 December 2002.

Group Turnover improved 33.1% to $112.1 million on the back of broad-based growth in all key markets. Net Profit attributable to shareholders rose 34.8% to $14.8 million for the year ended 31 December 2002 compared to the corresponding period in the previous financial year.

At the operating level, Earnings Before Interest, Income Tax, Depreciation and Amortisation (EBITDA) improved 24.5% to $21.2 million.

In view of the good performance, the Directors of FEH have recommended a first and final dividend of 0.5 cents per ordinary share and a special dividend of 0.75 cents per ordinary share.

Earnings per ordinary share increased by 34.8% to 4.30 cents while Net Asset Backing per ordinary share rose 32.8% to 14.63 cents.

FEH's Group Revenue for the year ended 2002 grew across the board with stronger sales volume achieved in all its key markets of Russia, Eastern Europe and Central Asia. Group Profit improved due mainly to higher turnover and better market penetration and the company's strong brand names and multiple brand distribution strategy.

Mr Tan Wang Cheow, FEH Chairman and Managing Director said: "We are pleased that Food Empire has achieved another year of double-digit growth. This is all the more encouraging as it was attained in a challenging year that continued to be plagued by the global economic slowdown."

Mr Tan added: "There was generally good sales growth in all of our core markets and also in our new markets in Middle East as well as Asia. This is due mainly to the strength of our brands and variety of our products. Our strong marketing and promotions efforts also led to higher sales and deeper penetration in the countries where we are operating."

Segmental Analysis

International sales continued to make up the bulk of the Group's Turnover with its contribution of more than 95%. Russia remains an important market, contributing 54.5% of Group Revenue while Eastern Europe and Central Asia portion was 32.9% in 2002. Sales from Other Markets including countries such as Western Europe, Vietnam, China and Middle East, increased to 12.6% of Group Revenue, compared to 9.5% in the previous financial year.

FEH's business in Russia remained strong with a 26.7% jump in Turnover to $61.1 million due to deeper market penetration and increased marketing and advertising. The Group also enjoyed a healthy increase in combined sales in Eastern Europe and Central Asia with a 31.6% rise to $36.9 million. This was attributable to increased emphasis on brand building and increase in the number of distributorship.

Sales increased in both beverage and non-beverage product categories for the period under review. Beverage products made up 89.5% of Group Turnover, a reduction of 4.6% from previous year following an increase in sales from the non-beverage products category. Group Turnover for the beverage category rose 26.5% to $100.3 million. Sales in the non-beverage category (which includes confectionery, convenience food and seafood) saw a strong growth of 139.0% to $11.8 million.

FEH continued its active marketing and product development efforts that included the launch of more new products in 2002 to expand the product range of its brands. New products that were launched included several new candy flavours such as the MacCandy Fruity Cream range and new beverages such as MacCoffee Millennium, MacCoffee Deluxe and B?same 3-in-1 flavoured coffee.

Outlook

Commenting on 2003, Mr Tan said: "The global outlook for 2003 continues to be uncertain due to weak economic factors and a sluggish US economy. Despite this environment, we are cautiously optimistic that our core markets will continue to grow as we will tap on our competitive strength and concentrate on continuous investment in brand building exercise, formulation of new quality products and innovative packaging designs.

"We will strive to drive sales with our strong marketing and promotions programmes in both our core and new markets. In Russia, which is a market with huge growth potential, we will step up efforts to have deeper penetration to reach more consumers. In other markets like Indo-China and China, we aim to raise our brand profile and build a stronger presence."

Foreign currency fluctuations will continue to be an important consideration as the bulk of the Group's turnover comes from overseas.

Barring unforeseen circumstances, the Board of Directors expects the Group to maintain a steady performance in FY2003.

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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 markets instant beverage products, frozen convenience food and confectionery. It also has a wholesale business that trades in frozen seafood.

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 10 offices (representative and liaison) in 9 countries in Russia, Ukraine, Kazakhstan, Poland, UAE, Turkey, Belgium, China and Vietnam.

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. Food Empire also markets a refreshing range of confectionery including butterscotch, coffee, cola and fruity chewy candies, and a delectable assortment of frozen convenience food.

Food Empire has more than 170 types of products under its own brands - MacCoffee, Klassno, FesAroma, B?same, Temasek Royal, Express, OrienBites, MacCandy and MacFood.





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 25/02/2003 to the SGX