Food Empire Holdings has reported earnings of US$31.5 million ($40.33 million) for the 1HFY2025 ended June 30, up 35.7% y-o-y.

The group’s revenue for the period came in 21.7% y-o-y higher at US$274.1 million, while operating profit came in 50.2% y-o-y higher at US$42.8 million.

Food Empire’s topline improvement was driven by strong performance of all core segments which achieved double-digit growth in 1HFY2025.

Its Russia segment generated the highest revenue among all core segments with a 21.6% y-o-y increase in sales due to price gains coupled with appreciation of the Russian ruble against the US dollar.

The group’s Southeast Asia segment delivered a revenue growth of 25.3% to US$77.5 million in 1HFY2025, led by the Vietnam market, which contributed more than 60.0% of the segment’s revenue.

Vietnam saw a 36.6% increase in revenue driven by higher sales volume and price gains during the reporting period, which was a result of ongoing marketing and promotional campaigns and an enhanced sales force, which led to increased customer acquisition.

Food Empire’s Ukraine, Kazakhstan and CIS segment achieved revenue growth of 19.4% in 1HFY2025 mainly due to price gains and increased sales volumes from certain markets as well as a full six months contribution from Tea House LLP, which became a subsidiary in May 2024.

Its South Asia segment reported a 25.1% increase in revenue from strong demand for both freeze-dried and spray-dried soluble coffee with both plants running at full capacity.

As a result, earnings for the group increased. However, this excludes a one-off, non-cash, fair value loss on redeemable exchange notes (REM) of US$32.6 million.

The group entered into a US$40 million REN agreement with Merit Genesis and Apex Genesis with an exchange price of $1.09. Financial accounting standards mandate that REN is to be measured at fair value through profit and loss, and recognised in the group’s interim consolidated income statement even though they are non-cash and do not reflect operating performance, the group says.

On June 30, the group entered a second supplemental agreement with the two previously mentioned entities, to ensure that it accounts for the REN under the “fixed-for-fixed” accounting classification, which provides a more accurate reflection of the underlying economic intent of the instrument.

The board of directors has declared an interim dividend of 3 cents per ordinary share, the first ever interim dividend declared by the group.

As at June 30, cash and cash equivalents stood at US$135.3 million.

Shares in Food Empire closed flat at $2.40 on Aug 13.