What’s Up? F&N

F&N

What’s Up? … dated Jan 2011

It is now focusing on the redevelopment of its 12.7 acre tract in Sect 13 of PJ.

Fraser & Neave Holdings Bhd (F&N) will redevelop the land in Petaling Jaya that has been housing its dairy manufacturing plant since 1959 to feature commercial and residential properties with gross development value (GDV) of at least RM1 billion.

The project is expected to kick start another major property venture for the group, which sees its development in Pudu coming to an end.

Its property division would, in the years to come, focus on transforming the 12.7-acre site into a notable landmark in Petaling Jaya, with the redevelopment to be undertaken in phases over a five- to eight-year period.

For the year ended Sept 30, 2010 (FY2010), F&N’s property division contributed RM72.3 million to the group’s total revenue of RM3.63 billion. In FY2009, the division chipped in RM62.9 million to a full-year revenue of RM3.27 billion.

Its property division would continue its journey to unlock and enhance values of its existing landbank.

The group has freehold land and buildings with net book value of RM90.9 million and RM260.5 million respectively, as at Sept 30, 2010. These include 276,196 sq ft of freehold land in Fraser Business Park , Kuala Lumpur , for the development of shopoffices; 2.64 million sq ft of freehold land in Hulu Langat for the development of residential property; and 132,052 sq ft of freehold land in Johor Baru for commercial property development.

Its development of Phase 2 of Fraser Business Park, marketed as Zon.e@Fraser Business Park , was completed and handed over at end-September, within the period under review. It has been renamed “Kompleks Metro Pudu” by the Kuala Lumpur City Hall .

Meanwhile, F&N’s RM350 million dairy manufacturing plant in Pulau Indah is scheduled for completion in the second half of next year. With a planned annual capacity in excess of 14 million cases, the plant would together with the group’s first greenfield condensery in Rojana , Thailand , generate a collective annual output of over 25 million cases.

The group posted a net profit of RM695.3 million for FY2010, an almost three-fold increase from RM224.9 million a year ago, boosted by gains from the disposal of its glass-manufacturing unit during the year. Its net assets per share stood at RM5.03 as at Sept 30.

Observers says F&N’s diversification into property may not go down well with some of its institutional investors who prefer to see the company as a pure consumer player supplying carbonated drinks.

F&N is good at manufacturing drinks but if it continues to pursue property development projects, there is a chance institutional investors might just sell their stake in the company.

F&N’s substantial shareholders as at Nov 2010 were SIngaporelisted F&N Ltd with 56.79% stake, Amanah Trustees Bhd (17.4%) and the EPF (6.12%).

For FY2010 ended Sept 30, 2010, its property division contributed rm32 million or 8.34% to the group’s total operating profit.

As at Sept 2010, the group had freehold land and buildings with a net book value of Rm91 million and rm261 million respectively. Net assets per share stood at rm5.05.

It is currently sitting on a cash pile of rm940 million while bank borrowings are only rm300 million. As such, it can afford to gear up to redevelop Sect 13 land.

However, F&N is not the only developer in the area that is looking at converting industrial land to commercial space.