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operations review
Financial Performance
Revenue for the financial year ended
31 December 2013 (“FY2013”) was
US$262.9 million, a year-on-year (“yoy”)
increase of 10.6% over the US$237.7
million revenue recorded in FY2012.
The Group’s revenue grew in all its three
geographical regions. In FY2013, sales to
the Group’s largest region, Russia, rose
by 11.7% to US$152.9 million compared
to US$136.9 million in FY2012. In the
Group’s Eastern Europe and Central Asia
region (comprising Ukraine, Kazakhstan
and the CIS Countries), sales increased
by 11.6% from US$74.6 million in FY2012
to US$83.2 million in FY2013. Sales to
the Group’s Other Markets increased by
1.9% from US$26.2 million in FY2012 to
US$26.7 million in FY2013 due to higher
sales in Vietnam and Myanmar.
For FY2013, the Group recorded a profit
after tax of US$11.3 million as compared
to US$20.2 million in FY2012
The decline in profitability was mainly due
to the following: -
1) Increase in Advertising and Promotion
(A&P) activities in key markets to
strengthen the Group’s market position
in the light of intense competition.
2) Staff costs increased due to higher
salaries and higher headcount arising
from newly acquired and newly set up
companies.
3) Foreign exchange losses.
4) Costs associated with investment in
new markets.
5) Start-up costs associated with the
Group’s pursuit of several upstream
green-field projects.
On the currency front, the Group saw
weaknesses in its key markets during
FY2013. The Russian Ruble fell from 30.4
Ruble per US dollar on 31 December
2012 to 32.7 Ruble per US dollar on 31
December 2013. Over the same period,
Ukrainian Hryvnia dropped from 8.08
to 8.24 Hryvnia per US dollar; while the
Kazakhstani Tenge fell from 150.3 to
153.6 Tenge per US dollar.
Property, plant and equipment increased
from US$33.6 million in FY2012 to
US$61.5 million, because of the Group’s
investment in several upstream green-
field projects.
Revenue
US$262.9
million
Profit After Tax
US$11.3
million
10.6%
Klassno booth at the 2013 CAEXPO in Nanning, China
Food Empire Holdings Limited Annual Report 2013
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