Business

FMF revenue up

By RACHNA LAL FMF Foods Limited’s financial year ended June 30, 2012, has been described as exceptional in terms of profitability. Chairman, Hari Punja, in the company’s 2012 Annual Report
02 Oct 2012 08:39

Flour, a major product of FMF Foods Limited, being packed at the company’s factory in Walu Bay, Suva yesterday. Photo: NAVNEET NARAYAN

By RACHNA LAL

FMF Foods Limited’s financial year ended June 30, 2012, has been described as exceptional in terms of profitability.
Chairman, Hari Punja, in the company’s 2012 Annual Report released by the South Pacific Stock Exchange yesterday, said this had been another satisfying year.
FMF Foods net group revenue increased by 11.28 per cent from $181.49 million during the previous financial year to $201.97m for the year ended June 30, 2012.
Mr Punja revealed the group’s profit after tax was $12.93m compared to $11.63m in the previous year.
The holding company recorded a profit after tax of $7.05m compared to a $6.61m profit the previous year.
The group includes the holding company as well its two subsidiaries – the Rice Company of (Fiji) Limited and Atlantic & Pacific Packaging Company Limited.
“The efforts taken in stabilising operations and rationalising its products and activities have been well-rewarded,” he said.
Mr Punja also attributed their exceptional performance to Government reducing income tax rates for Fijians.
“Increased disposable income in the hands of Fiji consumers as a consequence of reduced tax rates in the Government’s 2012 Budget resulted in enhanced consumption,” he said.

Commitment
Mr Punja has assured shareholders that FMF Foods would continue to focus on increasing its market share and improving its position in the larger Pacific region, while tirelessly working on managing costs.
“The company also intends to increase focus on its own ‘FMF’ and ‘Fine Fare’ brands to create a more stable base and reduce dependence on the volatile contract packaging business,” he said.

Export markets
Unfortunately, Mr Punja said the case with their export markets was not as good as biscuits, especially in Australia, had witnessed a significant downturn.
“This was partially to a gloomy non-mining sector economy and largely because of very aggressive pricing by the market leader in this segment,” he said.
“This trend is expected to continue for some more time with problems in the Eurozone and slowing down of China and India only adding to the global economic gloom.
“Competition for our biscuits from Asian countries has also heightened and we are experiencing severe pricing pressure with lower margin opportunities.
“It is therefore felt that 2012-13 will be far more challenging than 2011-12.”

Outlook
Mr Punja further noted that the international price of wheat had moved up by over 40 per cent since June 2012 because of an unprecedented drought in the USA and a possible export ban of wheat by Russia.
This, he said, was bound to impact their costs.
“Bulk of the company’s products still remain within the purview of the Fiji Commerce Commission’s price determination system,” he said.
“We are hopeful that the commission would be quick enough to adjust the prices of flour products as and when they are due for a correction.”

Dividends
Mr Punja said once again, FMF Foods was able to increase dividends, while staying with the necessity of strengthening the Balance Sheet.
Dividend paid was $1.2m against previous year’s $900,000; an increase of 33.33  per cent.
Shareholder funds have increased to about $60.97m from $49.5m in the previous year.
The company also significantly improved its gearing ratio (the ratio that compares the proportion of borrowed funds to the sum of shareholders’ funds plus net debt) from 53 per cent to 37 per cent.




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