They expected Lee Hsien Yang to face the media for the first time as Fraser & Neave’s chairman

IT was a news conference many journalists were looking forward to. They expected Lee Hsien Yang to face the media for the first time as Fraser & Neave’s chairman at the group’s full-year financial results announcement yesterday.

But Mr Lee was a no-show, and director and group company secretary Anthony Cheong fielded the questions.

Mr Lee was not required to attend the news conference, Mr Cheong said. ‘Mr Lee is a non-executive chairman, so he need not be here.’

Operationally, the strong property market helped the food and beverage and property and publishing conglomerate lift net profit for the full year ended Sept 30 by 18.5 per cent to $378.6 million, from $319.5 million.

Before exceptional items, net profit attributable to shareholders increased 28 per cent to $377.9 million.

Full-year revenue rose 25 per cent to $4.74 billion. Earnings per share rose to 28.7 cents from 27.3 cents.

‘Our properties division continues to benefit from better-than-expected development margins and higher rental rates achieved from new and renewed leases,’ Mr Lee said in a statement. ‘Likewise, for eight consecutive years, food and beverage has maintained strong growth momentum and delivered rising profits. Publishing and printing also showed good progress and is on track to return to historical levels of profitability.’

Development property, which accounts for the lion’s share of the group’s attributable profit, came in at $214 million for the full year. Revenue from development property grew 24 per cent to $1.4 billion for the year.

During the year, the company sold more than 1,680 units at 19 developments in Singapore and close to 200 units at five projects overseas. It launched One St Michael’s, St Thomas Suites and Soleil @ Sinaran to strong interest.

Meanwhile, F&N subsidiary Asia Pacific Breweries (APB) reported a 3 per cent increase in net profit attributable to shareholders to $133.7 million for the full year. This was on a 17 per cent increase in revenue to $1.78 billion.

CEO Koh Poh Tiong said: ‘APB achieved strong organic profit growth amidst a healthy regional economy. Our ongoing strategy to expand our business, enhance the equity of our brands, and continually enlarge the global footprint of Tiger beer have once again delivered robust top line growth.’

IndoChina - Cambodia, Laos and Vietnam - remained APB’s largest profit contributor, accounting for about 48 per cent of APB’s total profit before interest and tax.

F&N and APB have recommended a final dividend of 8.5 cents and 18 cents a share respectively.

In response to a recent BT report, Mr Cheong said that there is a possibility that F&N’s business may be split in the future, but not now. ‘There are ways of increasing shareholder value,’ he said, adding: ‘All kinds of options will be explored and scenarios worked out, I’m sure some of these process will include examining the scenario of break up. But at this stage, at this time, there’re no plans to split.’

He also acknowledged Temasek’s role in growing the F&B business for F&N. ‘Temasek was looking for a vehicle for F&B, and we were looking for somebody who has a good track record and good stream of deals, a very good deal-maker to help us grow our F&B business,’ he said. F&N looked at several deals but unfortunately none of them came to fruition, so it is still looking.

Mr Cheong also acknowledged differences between former CEO Han Cheng Fong and the board. ‘We don’t want to get into details about the differences but I think at this stage, differences in opinion are par for the course,’ he said. ‘It is common when you put a group of people together. Dr Han left not because he had a difference in opinion with the board but because this resulted in a dysfunctional relationship.’

The separation was amicable and both sides had moved on, Mr Cheong said.

On the search for the new CEO, he said that it is in the hands of the chairman of the board and chairman of the nominating committee. ‘I’m afraid we don’t have any progress reports,’ he said. But F&N is open to looking internally and externally.

When asked about who the likely candidates were, he said to much laughter: ‘Why don’t you ask Conrad Raj?’ - referring to the BT correspondent who has broken many stories on F&N, including Mr Lee’s appointment as chairman and the possible splitting up of F&N.

Source : Business Times - 14 Nov 2007