This Company Boosts Interim Dividend 60% -- Here's How its CEO Manages Growth and Shareholder Returns

Food Empire delivered another solid set of numbers for 1H2026, reinforcing the story that the company continues to be in a multi-year growth phase.

Aside from significant additional capacity scheduled through 2028, Food Empire is a combination of strong existing demand + brands with pricing power + some existing plants running at capacity.

1H2026 revenue rose 15% y-o-y to a record US$315.1 million, while normalised net profit increased 12.2% to US$35.3 million.

The strongest markets:

• Russia revenue jumped 24.6% to US$103.2 million, helped by higher sales volumes as well as a Russian rouble that appreciated by an average 12.3% against the USD.

• Central Asia did even better, with revenue rising 33.6% to US$60.5 million, driven by higher volumes in Kazakhstan, Uzbekistan and Turkmenistan.

Funding growth while keeping an eye on net margin

Southeast Asia revenue grew only 2.4% to US$79.3 million, while South Asia rose 4.4% to US$38.6 million.

CEO Sudeep Nair said he manages the portfolio of markets dynamically, and moves promotional spending toward markets where he sees the best opportunity.

Sales and marketing expenses rose 29.7% YoY to US$30.2m, equivalent to 9.6% of revenue, versus 8.5% in 1H25 and roughly 7% two years ago.

Asked about the jump, he said “we don’t monitor it that way”.

Instead, management looks at the group's net margin, has “certain targets of net margins” to maintain, and invests what is available between gross margin and the desired net margin back into the business through promotions, discounts and brand building.

As a result, operating profit growth of 10.2% lagged revenue growth of 15%. Normalised net profit margin stayed stable at 11.2%.

CafePho323 Cafe Pho is Food Empire's leading brand in Vietnam.On the Vietnam business, he said it was doing well and had gained market share.

“Cafe Pho” had progressed from No. 4 two years ago to No. 3 and now No. 2, although the gap over No. 3 is only around one percentage point, he said.

Food Empire has deliberately toned down promotional spending in Vietnam to test the profitability and lasting impact of the previous year's investment.

In Russia, while headline articles suggest Western brands have pulled out of the country, many food-related MNCs (including Nestle) remain and local players are entrenched, maintaining intense competition.

Sudeep said competitors with full-cycle coffee plants inside Russia have a cost advantage because Food Empire has to import coffee products from overseas plants. That makes Food Empire's recent Russian growth more impressive.

Factory expansions underpin future growth

In India, Food Empire's soluble coffee factories are operating at near-full capacity.

Meanwhile, the expansion of its spray-dried soluble coffee facility in India is on track for completion by end-2027, while its new freeze-dried coffee plant in Vietnam -- its largest investment ever -- is expected to be completed in 2028.

Its new coffee-mix plant in Kazakhstan is already operational and is expected to contribute positively from 2H26.

Country	Expansion	Capacity impact	Status / timing	Investment	Main implication
Malaysia	Non-dairy creamer	Capacity doubled	Expansion completed 2Q24; still ramping	—	Utilisation/margin upside through 2027
Malaysia	Snacks factory	Expanded production	Expansion completed / ramp-up phase	—	More snack output
Kazakhstan	New coffee-mix factory	New regional capacity	Operational now, scaling up	~US$30m initial project	Lower logistics costs + better Central Asia margins
India	Spray-dried soluble coffee expansion	~60% increase	Completion by end-2027	US$37m	Incremental capacity where demand already exceeds supply
Vietnam	New freeze-dried soluble coffee plant	Major new standalone plant	Completion expected 2028	~US$80m	High-value coffee ingredient growth from 2028 onward

60% jump in interim dividend

On Food Empire's 15% growth

“Double digits is a fantastic growth rate in our industry… for consumer staples, a double digit growth rate is considered very good, very healthy....

"Don’t look at a single geography. Look at what the group delivers overall, because that’s how I’m managing the work.”
-- CEO Sudeep Nair

Cash flow also bears watching.

Operating cash flow fell to US$26.1 million from US$32.4 million, while capital expenditure increased sharply to US$30.1 million from US$11.9 million as Food Empire invested in new capacity.

The company had US$151.3 million of cash at end-June and remained in a net cash position.

This is a growing company consuming cash to create future capacity, rather than the extremely cash-rich, low-capex Food Empire of several years ago.

Shareholders received a strong encouraging signal: the interim dividend was raised from 3 Singapore cents to 4 cents, a 60% increase after factoring in the June 2026 1-for-5 bonus issue.

Sudeep said management's aim has been to keep increasing ordinary dividends.

At year-end, special dividends are decided after reviewing available cash and upcoming investment requirements.

dividend8.26 1H2026 dividend is effectively +60% as a 1-for-5 bonus issue in June 2026 increased the issued share count by 20%. Source: Food Empire

Takeaway

MacCoffee4.26 MacCoffee is the key brand of Food Empire in markets such as Russia and Central Asia.

Overall, 1H26 strengthens the Food Empire investment case.

Demand remains healthy, Russia and Central Asia are booming, existing South Asian capacity is tight, and new factories should support growth into 2027 and beyond.

Sudeep said such plants make much better money once utilisation exceeds roughly 80%. That means some of Food Empire's future profit growth can come simply from sweating already-built assets.

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