Company Update: 9 March 2026
Reactive playbook paying off, diversification becomes the edge
- FY25 was a step change year. Revenue reached US$576.9m (+21.1% YoY) and normalised NPAT rose to US$68.6m (+37.0% YoY). The Group proposed a record dividend of S$0.12 per share for FY25.
Vietnam Remained The Growth Engine In Southeast Asia
Food Empire raised prices modestly to reflect coffee costs while increasing marketing to gain share, delivering Southeast Asia revenue +14.3% YoY in FY25.
FY25 Financial Results
Food Empire Holdings reported higher revenue of US$576.9mn for FY25, up 21.1% YoY, compared to US$476.3mn in FY24, led by strong growth across its key markets on resilient consumer demand. The company’s topline was supported by higher sales volume and pricing actions, alongside currency appreciation in several operating markets versus the US dollar despite elevated coffee input costs. Food Empire also reported an operating profit of US$93.4mn in FY25, up 47.5% YoY, compared to US$63.3mn in FY24, reflecting operating leverage and disciplined cost management. Normalised net profit after tax rose by 37.0% to US$68.6mn in FY25, compared to US$50.0mn in FY24.
Valuation & Action
We maintain an OUTPERFORM recommendation and increase our TP to S$3.70 from S$2.69, based on a Discounted Cash Flow (DCF) valuation with a terminal growth rate of 2% and a WACC of 10.0%, representing an upside of 23.1%.
We believe the rerating is underpinned by Food Empire’s decade long diversification playbook that allows it to re allocate profit pools across markets, using margin strength in Russia and Central Asia to fund disciplined share gains in Southeast Asia, particularly Vietnam. We also expect demand to remain resilient across key markets, supported by continued brand investments and capacity ramps, including the commencement of production at the Kazakhstan coffee mix facility in 1Q26 and Malaysia snacks expansion in 2Q26. Our model reflects a higher NPM forecast of ~14.5% versus consensus, premised on coffee input costs moderating from FY25 highs and a structural normalisation in sales and marketing intensity following the FY25 share capture phase, while utilisation improvements in ingredients and new capacity should further support operating leverage through FY26 to FY30.
Risks
The company is exposed to currency translation risk as it operates its business in several key markets and coffee input costs.
