Stronger Russian rouble drives Food Empire’s Q1 revenue up 16.9% at US$159.7 million

[SINGAPORE] Instant coffee specialist Food Empire posted a 16.9 per cent rise in revenue to US$159.7 million for the first quarter ended Mar 31.

This is its strongest Q1 revenue performance, due to growth across most markets and the stronger Russian currency, the company announced in a business update after trading hours on Wednesday (May 13).

Food Empire’s board on Wednesday also approved a one-for-five bonus share issue, in which shareholders will receive one bonus share for every five ordinary shares held.

The company said: “The group believes this bonus issue will enhance liquidity and therefore, institutional relevance as it will improve accessibility for institutional investors requiring minimum liquidity thresholds.”

Q1 revenue in Russia rose 29.4 per cent to US$51 million, fuelled by higher sales, price gains and the Russian rouble appreciating 16.5 per cent against the US dollar during the quarter.

Revenue was up 36.4 per cent at US$30.7 million in Central Asia, with product launches and price gains in Kazakhstan and Uzbekistan.

This was “further supported by targeted marketing promotions, new sales channel development and distribution network growth”, the company said.

South-east Asia and Europe likewise posted revenue growth of 7.5 per cent and 5.9 per cent, respectively. Vietnam and Ukraine were among the key growth markets, with marketing continuing in Ukraine “despite the challenging environment” there, Food Empire said.

Only South Asia posted a topline contraction, with revenue down 2.1 per cent to US$18.7 million.

Nevertheless, Food Empire’s combined revenue from Asia has surpassed its traditional markets with diversification and brand-building efforts since 2013, said the company’s chief executive Sudeep Nair.

Looking ahead, the company is “cautiously optimistic that the growth momentum will carry through the rest of the year”, he said.

Food Empire’s new Kazakhstan coffee-mix manufacturing facility is expected to contribute positively this year.

It also plans to expand its spray-dried soluble coffee manufacturing facility in south India by 2027, and add a new freeze-dried soluble coffee manufacturing facility in Vietnam by 2028.

That said, Food Empire is cautious about the impact of the Middle East war, which has brought higher energy costs, inflationary pressures and supply chain disruptions.

“The group will continue to monitor the situation and conduct periodic reviews of its business strategies to manage these risks,” it said.

Food Empire ended Wednesday at S$3.08, up by S$0.03 or 1 per cent.