F&N

F&N: Announced 1Q12 results which were slightly below estimates. Rev at $1.4b, -10.6% yoy and -29% qoq, while core net profit (Excluding exceptionals) at $151m, +2.2% yoy and -14.6% qoq.

Results saw strong earnings growth from grp’s breweries division, which rose 30% to $159m driven by vol growth and price increases in the SE Asian (+18% PBIT), Indochina (+18% PBIT) and Oceanic (+48% PBIT) markets. This offset declines due to the implementation of IFRS115 regarding the completion accounting of overseas profits.

Soft drinks division meanwhile, saw a decline of 18% in rev, on a 13% decline in vol due to the split with Coca-Cola. FNN has taken steps to recover volumes by introducing additional products such as Red Bull, Zesta, F&N Fun Flavors as well as Clearly Citrus which was previously disallowed under the previous licensing agreement. Excluding impact of Coke, rev and vol would have risen 14% and 18% respectively.

Ppty development revenue dipped 34% YoY to $181m in 1Q12 due to the effects of completed projects in SG and lower sales from overseas development projects. However grp expect pre-sold development projects such as Punggol Watertown, Seastrand and Boathouse to underpin earnings in the next two years. Meanwhile, overseas, sales progress at the Queens Riverside projects has seen solid take-up of 125 units.

Ratings as follow:
Deutsche Maintains Buy with $7.32 TP
Kim Eng downgrades to Hold with $6.43 TP