MAINBOARD-LISTED Food Empire on Monday (Nov 11) posted an 11.4 per cent rise in revenue to US$118.9 million for its third quarter ended Sep 30, from US$106.7 million a year ago.
This was mainly due to improved revenue growth across all its markets in Asia, led by South-east Asia, which had the highest revenue increase at 23.2 per cent, the instant coffee manufacturer said in a business update on Monday (Nov 11). It did not disclose net profit figures for Q3 FY2024.
The strong revenue showing from South-east Asia was driven by Vietnam, which has emerged as the group’s fastest-growing market. Food Empire attributed this to “intense marketing efforts across all channels”, including more brand-sponsored giveaways with purchases that led to stronger sales and greater brand awareness.
On top of that, it strengthened its Vietnam sales force and expanded coverage of its products to more geographical areas, giving consumers greater access to its products.
South-east Asia’s revenue was also boosted by Malaysia, which recorded higher sales volumes of snacks and non-dairy creamers, the group said.
Meanwhile, its South Asia segment posted a revenue growth of 16.3 per cent, mainly due to increased sales volumes and higher pricing in line with increased coffee prices.
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Sales from its Ukraine, Kazakhstan and the Commonwealth of Independent States segment was up 10.3 per cent. This was attributed to higher revenue from Kazakhstan brought in by tea product manufacturer Tea House, which became a subsidiary of the group in May 2024.
Despite ongoing market challenges, Food Empire recorded a 1.8 per cent rise in revenue from its Russia segment. Its “others” segment posted a 7.4 per cent rise in revenue due to higher contribution from the Africa market.
For the nine months ended Sep 30, Food Empire’s revenue was up 12.8 per cent at US$344.3 million, from US$305.1 million the year before.
Looking ahead, the group noted that global markets were facing challenges including climate change, currency volatility, supply chain disruptions, geopolitical tensions and macroeconomic uncertainties. These factors have resulted in higher prices of raw materials in the instant beverage industry, it said.
It added that it was monitoring the macroeconomic environment and geopolitical events that may impact its business in the short term, while putting in place strategic growth plans in some of its fastest-growing segments for the longer term.
“(We are) optimistic that these initiatives, underpinned by continuous investments in brand-building activities, product innovation and new product launches, will support sustainable and quality business growth for the group,” it added.
It will also continue to conduct periodic reviews and adjust its sales and pricing strategies to mitigate rising raw material costs.
Group chief executive Sudeep Nair said: “We believe Food Empire is well-positioned for future expansion in Asia where there is healthy economic growth, balancing some of the geopolitical challenges from our more traditional markets in Eastern Europe.”
He added that the company’s diversification into ingredients manufacturing provides “greater stability and control over the supply chain”, while its investments in production capacity for the group’s own products will enable it to support increasing demand from key markets.
Shares of Food Empire closed at S$1.01 on Monday, down S$0.01 or 1 per cent, before the update.
