Dutch Lady Malaysia to sell PJ factory land

by FARA AISYAH / pic credit: dutchlady.com.my

DUTCH Lady Milk Industries Bhd (Dutch Lady Malaysia) plans to dispose its factory land at Jalan Professor Khoo Kay Kim in Petaling Jaya (PJ), Selangor, to fund the purchase of freehold land in Bandar Baru Enstek, Negri Sembilan.

On July 23, 2020, Dutch Lady Malaysia obtained shareholders’ approval for the purchase of land intended to construct manufacturing facilities thereon in line with the group’s long-term plans of improving its manufacturing capabilities to keep up with the increasing demand for its products and with the new customer trends.

“As part of the assessment, an independent real estate agent has been appointed to act on behalf of Dutch Lady Malaysia to seek offers for the land plots from the open market by way of a public tender after the date of this announcement.

“Final decisions on the land parcels will only be made by the board after the assessment of the various scenarios is completed and announcements relating thereto will be made, if necessary, at the appropriate time in accordance with the Main Market Listing Requirements of Bursa Malaysia Securities Bhd,” it said in an exchange filing yesterday.

The company added that it is too preliminary to ascertain when the construction works for the new manufacturing facilities will commence since multiple scenarios are being evaluated.

Based on Dutch Lady Malaysia annual report for 2019, the current factory land located and held under Lot 78, Lot 79 and Lot 48 in Jalan Professor Khoo Kay Kim — formerly Jalan Semangat — has a net book value of RM28.4 million.

The factory buildings, office complex and warehouse are built on a 432,617 sq ft leasehold land expiring in 2059.

A check on propertyguru.com.my showed that leasehold industrial land in the area costs around RM500 per sq ft. Earlier this year, Dutch Lady Malaysia said it is acquiring three parcels of freehold industrial land measuring 13.18ha in Bandar Baru Enstek from Pelaburan Hartanah Bhd for RM56.79 million.

The dairy company also said the purchase would be fully satisfied via internal funds.

Dutch Lady Malaysia’s net profit rose 23.5% to RM21.23 million in the second quarter ended June 30, 2020 (2Q20), from RM17.19 million a year ago, driven by higher demand for its products, and lower and efficient commercial spend.

This resulted in higher earnings per share of 33.2 sen for 2Q20 compared to 26.9 sen for 2Q19.

Dutch Lady Malaysia said 2Q20 earnings were, however, partially impacted by negative mix (channel and portfolio) and increased in global dairy raw material prices.

Revenue for the quarter increased by 12.3% to RM273.52 million from RM243.61 million a year ago.

The group saw its net profit fall 13.9% to RM43.97 million in the cumulative six months from RM51.09 million a year ago, even though revenue increased 3.2% to RM524.69 million versus RM508.59 million a year ago.

Dutch Lady Malaysia closed at RM39.22 bringing its market capitalisation of RM2.51 billion.