Food Empire Holdings Full Year 2024 Earnings: Beats Expectations

Food Empire Holdings Limited, a Singapore-based investment holding company, has reported its full-year earnings for 2024, and the results are nothing short of impressive. The company, which specializes in branding and manufacturing in the food and beverage industry, saw a significant increase in revenue, reaching US$476.3 million, a 11.9% jump from the previous year. However, the story behind these numbers is more nuanced, revealing both the company's strategic strengths and the challenges it faces in an increasingly complex global market.

The company's revenue growth can be attributed to several strategic investments and market-specific initiatives. In the South-East Asia segment, particularly in Vietnam, the company saw a 27.3% increase in revenue to US$129.4 million. This growth was driven by intense consumer marketing and promotional activities, which are direct outcomes of the company's investments in R&D and new product launches. The non-dairy creamer plant in Malaysia also recorded higher sales volumes, further boosting revenue in this segment.

In the Ukraine, Kazakhstan, and CIS segment, the revenue achieved a 12.6% increase to US$124.7 million. This improvement was driven by higher sales across the segments, particularly from the Group’s CIS market, which benefited from higher sales volume and higher pricing. The acquisition of Tea House LLP, a leading producer of tea in Kazakhstan, in May 2024, also contributed to this growth. This strategic investment is expected to yield further returns as the Group continues to expand its product offerings and market reach.

The South Asia segment also saw a 24.9% increase in revenue to US$61.4 million, primarily due to increased sales contribution from instant coffee products and price adjustments to reflect higher costs of coffee beans. This segment's growth underscores the effectiveness of the Group's R&D efforts in developing products that meet consumer demands and market conditions.

However, the company's normalised net profit after tax for FY2024 decreased from US$56.5 million in FY2023 to US$50.0 million. This decline can be attributed to several factors, including lower profit contribution from the Group’s Russia market due to short-term price disruptions and higher ingredient prices and operating expenses. The company's commentary states: "For 2H2024, excluding the fair value gain of US$2.8 million from the redeemable exchangeable notes1, the Group’s normalised net profit after tax decreased by 10.1% to US$26.8 million mainly due to lower profit contribution from the Group’s Russia market arising from short term price disruption in the market."



To mitigate these challenges, Food Empire plans to continue investing in product R&D, new product launches, brand building efforts, as well as advertising and promotion. This strategy is aimed at maintaining stable demand for its products across all segments. The company's commentary states: "Food Empire expects demand for its products to remain stable across all its segments as it continues to invest in product R&D, new product launches, brand building efforts as well as advertising and promotion." This proactive approach is designed to enhance operational efficiency and market competitiveness, thereby offsetting the negative impacts of price disruptions and rising costs.

Looking ahead, Food Empire's strategic investments in product R&D and new product launches are expected to drive further revenue growth and enhance the Group's market position in the coming years. For example, the planned investment of US$80 million in a new Vietnam freeze-dried soluble coffee manufacturing facility is a strategic move that will not only increase production capacity but also support the Group's expansion into new markets and product categories.

In conclusion, Food Empire Holdings' full-year 2024 earnings report paints a picture of a company navigating a complex global market with strategic investments and market-specific initiatives. While the company faces challenges such as price disruptions and rising costs, its proactive approach to R&D and new product launches positions it well for future growth. As the company continues to invest in its product portfolio and market reach, it is poised to maintain its leadership position in the food and beverage industry.