Dutch Lady’s 4Q net profit falls 12% on pricing strategy

By S BIRRUNTHA / Pic By TMR File

DUTCH Lady Milk Industries Bhd’s net profit fell 12% to RM26.67 million in the fourth quarter ended Dec 31, 2019 (4Q19), from RM30.3 million a year earlier, mainly dragged by pricing strategy, increased raw material prices and negative exchange-rate impact.

Earnings per share for the quarter decreased to 41.7 sen from 47.35 sen the year prior, the group said in an exchange filing yesterday.

Quarterly revenue rose 3.9% to RM281.76 million from RM271.15 million in the same quarter of 2018, as volume growth accelerated 9.3% driven by innovations focusing on occasions and affordability.

The volume growth was in line with the group’s ambition to increase the consumption of milk in Malaysia and subsequently uplift Malaysians’ health status, it added.

For the financial year ended Dec 31, 2019 (FY19), the group’s net profit slipped 20.5% to RM102.96 million from RM129.45 million last year, although revenue expanded 1.9% to RM1.07 billion from RM1.05 billion the year before.

On prospects for 2020, Dutch Lady said global dairy prices are projected to increase compared to 2019.

For the long term, the group is positive due to the “strength of its brands” and the increasing need for and recognition of milk and its complementing dairy products among Malaysians.

“The company will continue to focus on driving the penetration of milk via innovations to capture multiple occasions. Affordability of milk will continue to be high on the agenda of the company to ensure sustainable growth of dairy in Malaysia.

“We will also continue to scale our dairy development programme to increase both the quality and quantity of local fresh milk,” it said.

At the same time, the company will continue to make efforts to improve operational efficiency in order to stay agile and adapt to macroeconomic changes.