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Food Empire
05-05-2011, 08:43 PM.
Post: #11
RE: Food Empire
Food Empire posts 15% drop in Q1 earnings

DESPITE a surge in revenue, Food Empire Holdings posted a 15 per cent year-on-year fall in net profit to US$3.4 million for the first quarter ended March 31, 2011.


Mr Tan: 'We continue to be aggressive in our brand-building activities and our efforts to expand our distribution base'
One factor was that the corresponding quarter last year included a tax writeback.

The first three months this year saw revenue climbing 31.3 per cent to US$50.8 million. But earnings were affected by higher raw material and transport costs, as well as increased operating expenses.
The improvement in revenue was supported by strong performance by the group's key markets. Giving a market breakdown, the group said that revenue increased by 43.4 per cent to US$30.2 million in its largest market, Russia.

Sales in Eastern Europe and Central Asia also increased by 17.2 per cent to US$15 million. In particular, the group grew its sales in Ukraine and Kazakhstan by 5.2 per cent and 31.2 per cent respectively.

Tan Wang Cheow, the group's chairman and managing director, said five consecutive quarters of double-digit revenue growth showed the group's strategy was on the right track.

'We continue to be aggressive in our brand-building activities and our efforts to expand our distribution base,' he added.

The group's net assets as at March 31, 2011 were US$138.5 million, representing a net asset value per share of 26.2 US cents, while cash and bank balances were US$33.4 million.

'The group expects its key markets to continue to perform well as global economic sentiments have remained relatively positive,' said Mr Tan. He also reported that the group's new markets continue to show potential.

Food Empire intends to pursue opportunities outside Russia to create a more balanced portfolio.

Looking ahead, the group warned that expected raw material price volatility in the coming 12 months would be one of its main challenges.

No dividends were declared this quarter.

Food Empire is a global branding and manufacturing company in the food and beverage sector. Its products include instant beverage products, frozen convenience food, confectionery and snack food.

Food Empire was last traded at $0.42.


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03-10-2012, 02:06 PM.
Post: #12
RE: Food Empire
There ain't many food/confectionery companies left in SGX. This is one of the remaining.

A strong brand of coffee mix in Russia, east Europe and central Asia according to the company.

relatively cheaper than Super or VizBranz.

substantial shareholders include Salim Group.

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04-10-2012, 06:23 PM.
Post: #13
RE: Food Empire
Tan Wang Cheow just stepped down as MD, remains as Chairman. Sudeep Nair appointed as CEO. Statement gives reason as "succession."

http://info.sgx.com/webcorannc.nsf/Annou...endocument

Not vested.

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05-10-2012, 01:21 AM.
Post: #14
RE: Food Empire
Cosmetic. TWC is still the EXECUTIVE Chairman Smile

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17-10-2012, 07:56 AM. (This post was last modified: 17-10-2012, 07:58 AM by nitro.)
Post: #15
RE: Food Empire
Q1.) Reading through 2011 AR pg111/note24, noticed the 'trade receivables past due but not impared' has increased >100%
2010 : U$4,628,000
2011 : U$10,890,000

comparing with SuperGroup's trade receivables
2010 : S$72,339,000
2011 : S$80,015,000

However, under FE's financial risk mgmt on pg134/note39a, it states
"trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment with the Group."

Does it means U$10,890,000 is owed by uncreditworthy debtors?

Q2.) pg100/note13
The valuations are estimates of the amounts for which the assets could be exchanged between a knowledgeable willing buyer and knowledgeable willing seller on an arm’s length transaction at the valuation date. The fair value of the investment properties is determined at US$11,937,000 (2010: US$4,660,000).

There is a gain of fair value of U$7,277,000, but it is not reported under 'CashFlow from operating activities/ Gain on Fair Value of Investment Properties"?

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17-10-2012, 08:31 AM. (This post was last modified: 17-10-2012, 08:34 AM by freedom.)
Post: #16
RE: Food Empire
(17-10-2012, 07:56 AM)nitro Wrote: Q1.) Reading through 2011 AR pg111/note24, noticed the 'trade receivables past due but not impared' has increased >100%
2010 : U$4,628,000
2011 : U$10,890,000

comparing with SuperGroup's trade receivables
2010 : S$72,339,000
2011 : S$80,015,000

However, under FE's financial risk mgmt on pg134/note39a, it states
"trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment with the Group."

Does it means U$10,890,000 is owed by uncreditworthy debtors?

Q2.) pg100/note13
The valuations are estimates of the amounts for which the assets could be exchanged between a knowledgeable willing buyer and knowledgeable willing seller on an arm’s length transaction at the valuation date. The fair value of the investment properties is determined at US$11,937,000 (2010: US$4,660,000).

There is a gain of fair value of U$7,277,000, but it is not reported under 'CashFlow from operating activities/ Gain on Fair Value of Investment Properties"?

for Q1, though the percentage is huge, the absolute amount is rather small. there could be multiple reasons. It could be that they extend their customers' credit period. It could be that they have new customers in new market. It could be that the existing customers was expanding fast. Or it could be a combine of the above. I would rather give the managers the benefit of doubt before it deteriorate their balance sheet further.

for Q2, there is cashflow from investing activities, purchase of investment properties 6,418,000. this should explain most of its 7,277,000.

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17-10-2012, 12:13 PM.
Post: #17
RE: Food Empire
(17-10-2012, 08:31 AM)freedom Wrote: for Q2, there is cashflow from investing activities, purchase of investment properties 6,418,000. this should explain most of its 7,277,000.

I am not expert in auditing or reading AR, still learning.

Based on the wordings, one is 'gain in fair value', whereas the other is 'purchase of investment properties', shouldn't 'gain in fair value' be reflected under "'CashFlow from operating activities/ Gain on Fair Value of Investment Properties"?

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17-10-2012, 12:18 PM.
Post: #18
RE: Food Empire
Gain in fair value is a non-cash item and therefore should be subtracted from PAT to obtain Cash Flow from Operations, using indirect method of preparing Cash Flow Statement.
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17-10-2012, 12:37 PM.
Post: #19
RE: Food Empire
I was attracted to this company in 2003-4, when I shared the due diligence on Super and Food Empire at the Cricket Club with some Wallstraits members. I bought about 10 lots of each (both were trading at about 30-40 cents). Russia and CIS are new markets, high growth, but also high forex risk. But the industry was also good in that (IIRC) coffee is the most widely consumed beverage in the world, and as the CIS develops, more people will have urban, busy lifestyles, and demand for 3-in-1 will increase. The consumer behaviour can also be sticky in that once you have brand loyalty, you will continue to buy the same brand even with abt 5% price increases. But as I wrote in Circle of Competence thread, the branding by FE seemed to be too much wheel spinning to me, so I eventually divested.

For those doing due diligence, this may be useful:
http://rsbf.org.sg/media/docs/research-b...3_2011.PDF

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17-10-2012, 01:13 PM.
Post: #20
RE: Food Empire
(17-10-2012, 12:13 PM)nitro Wrote:
(17-10-2012, 08:31 AM)freedom Wrote: for Q2, there is cashflow from investing activities, purchase of investment properties 6,418,000. this should explain most of its 7,277,000.

I am not expert in auditing or reading AR, still learning.

Based on the wordings, one is 'gain in fair value', whereas the other is 'purchase of investment properties', shouldn't 'gain in fair value' be reflected under "'CashFlow from operating activities/ Gain on Fair Value of Investment Properties"?

sorry, I think I misunderstood your question earlier.

the valuation is just an opinion, which was not considered in the financial report. that's why there is no fair value gain of investment properties.

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