17th November 1997
FIRST PACIFIC'S BERLI JUCKER NINE-MONTH PROFIT FELL 33 PER CENT
First Pacific Company Limited's Thai subsidiary, Berli Jucker Public Co. Ltd., announced today that net income for the third-quarter declined 58 per cent to THB75.1 million from a year earlier and was off 33 per cent in the year's first nine months to THB310.4 million.
Foreign exchange losses due mainly to the floatation of the baht amounted to THB128.7 million after tax and minority interests over the first nine months. Excluding these losses, net income was THB439.2 million, off 4 per cent from THB 458.7 million a year earlier.
Consolidated total revenues increased by 10 per cent in the third quarter to THB2.83 billion and was up 6 per cent in the first nine months to THB8.02 billion.
Earnings per share for the nine months declined 33 per cent to THB5.37 from THB8.03 due mainly to foreign exchange losses.
Commenting on the results for the third quarter, Dr Adul Amatavivadhana, Berli Jucker's President, said:
"Our overall revenue growth of 10 per cent in the quarter demonstrates the strength of our businesses even in these difficult times. Net income has been held back by foreign exchange losses and lower margins as the Group takes time to adjust selling prices for its products.
"Sales of consumer products in the third quarter increased by 12 per cent, with a more modest increase in profit contribution, driven mainly by the success of our snack foods brands. There was a distinct slowing in sales momentum for our paper products, personal care and wine ranges.
"The technical products group achieved 16 per cent sales growth led by our medical products and stationery lines. Profit contribution from this group, which imports most of its products, was reduced from the same level as a year ago by foreign exchange losses.
"In the packaging group, Thai Glass's sales fell 6 per cent as it continued to suffer from reduced demand for bottles from spirits producers and soft drink manufacturers. Profit contribution was reduced by 59 per cent due to a combination of lower volumes, reduced margins pending price increases to take place in the fourth quarter, and foreign exchange losses on unhedged US dollar borrowings and trade payables. Berli Prospack, in which we acquired a 50.1 per cent shareholding in June, achieved a modest operating contribution in the quarter.
"Sales at the engineering group increased 34 per cent due to substantially increased productivity at Thai-Scandic Steel. However, foreign exchange losses on imported steel for certain fixed-price contracts pushed the company into losses for the quarter. The customer has indicated that it is awaiting guidance from Government on how Thai-Scandic Steel and other contractors should be compensated for these losses but no benefit of this is reflected in the financial statements. There was no contribution from Siemens Limited in the quarter."
Regarding foreign exchange issues, David Nicol, Berli Jucker's Chief Financial Officer, said:
"In early July we purchased additional foreign exchange cover for US dollar debt at the Company and at Thai Glass and for a proportion of the trade payables at Thai-Scandic Steel and for Berli Jucker's medical products group. Further foreign exchange hedging was purchased throughout the quarter. As a consequence, the foreign exchange losses in the third quarter were incrementally lower than the provision booked in the second quarter which was based on closing exchange rates on the 3rd of July.
"The bulk of our US dollar debt is hedged into baht using Principal Only swaps which protect us from translation losses on the debt as the baht has weakened. We are nevertheless open on our interest payments to exchange rate fluctuations and are in the process of taking further steps to reduce this exposure."
Dr Adul went on to comment on the outlook for the full year:
"Price rises have been implemented in most areas to recover a proportion of our cost increases associated with the weakening baht. Our result for the fourth quarter should benefit from rising demand for glass containers, particularly beer bottles, albeit there may be softer demand for other products. I also anticipate reduced foreign exchange rate volatility for the rest of the year to which, in any event, the Group has a lower exposure due to its increased foreign exchange cover."
First Pacific, which owns approximately 60 per cent of Berli Jucker, is a Hong Kong-based, Asian-oriented conglomerate with operations in four core areas: Marketing & Distribution, Telecommunications, Property and Banking.
For further information, please contact:
| Berli Jucker Public Company Limited: | |
| Dr Adul Amatavivadhana President |
Tel: (662) 367 1012 |
| David Nicol Executive Vice President & C.F.O. |
Tel: (662) 367 1024 E-Mail: davidnicol@berlijucker.co.th |
| First Pacific Company Limited: | |
| Robert Sherbin Group Vice President Corporate Communications |
Tel: (852) 2842 4380 |
Company information can also be accessed on:
| Web Site: |
http://www.firstpacco.com http://www.irasia.com/listco/hk/firstpac |
E-mail: info@firstpac.com.hk |
Net income for the nine months ended 30th September 1997 was 33% lower than for the same period in 1996 due primarily to foreign exchange losses associated with the floatation of the Baht.
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