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FMF Foods Records 9% Growth in Profits

An extract from the Chairman of our Board, Mr Hari Punja, in his report to the South Pacific Stock Exchange:

"The year under review was characterized by sluggishness in the FMCG sector (Fast Moving Consumer Goods), which was echoed in your company’s sales. Though the Fijian economy is in a buoyant state on the back of structural reforms and a successful general election, growth in the country is heavily skewed towards hard goods such as automotive, consumer durables, housing and construction. This growth has been largely fuelled by a sharp increase in retail lending by banks and financial institutions. So as we enter the third consecutive year of increased borrowings for hard goods, we are also starting to see a lot of monies going towards repayment of such loans. This re-channeling of disposable income by consumers has meant reducing spend on FMCG products, especially in the indulgence categories.

Group sales grew very marginally by 3.1% from $ 211.82 m in 2013-14 to $ 218.38 m in 2014-15. While the group’s rice, noodles and packaging businesses recorded good growth, its other units had only moderate increases, with flour sales being the most flat amongst the lot. This was also because of a substantial reduction in average sale price of flour, consistent with the general decline in global wheat prices. On biscuit exports, the Australian market continued to decline owing to the general state of its economy and accentuated by aggressive price-cutting by its most dominant player. Your company however continued to make strong inroads into Pacific Islands Countries where the focus is on our own brands rather than private label manufacture which is our main market in Australia.

Notwithstanding the sluggish sales growth, your Company did well on the operating results. Tight operations helped the company beat inflationary cost increases and deliver a 9% higher Net Profit of $17.46 m against $ 16.00 m last year."