Categories: BusinessNews

Farm Fresh’s 4Q net profit plunges 72% amid rising dairy raw material prices

Farm Fresh Bhd net profit for the fourth quarter ended March 31, 2023 (4Q23) fell by 72.38% to RM4.89 million  compared to RM17.68 million in the same period the previous year. 

The company’s earnings were adversely impacted by a decrease in gross profit, which was adversely affected by escalating prices of major dairy raw materials.

The dairy manufacturer’s revenue increased by 26% to RM161.36 million, attributed to a 15.2% rise in Malaysian revenue driven by positive Ramadhan sales and the School Milk Program. However, the earnings per share for 4Q23 decreased to 0.26 sen from 1.08 sen in the previous year.

For the cumulative period, Farm Fresh recorded a net profit of RM50.08 million, down from RM79.89 million. The company’s full-year revenue reached RM629.69 million, marking a 25.5% increase. The growth was mainly driven by higher school milk sales, increased sales of ready-to-drink (RTD) milk products, and the positive impact of launching new products. Additionally, Farm Fresh experienced increased Australian revenue of RM45.5 million due to higher external sales from Goulburn Valley Creamery Pty Ltd.

Farm Fresh expects farmgate milk prices in Australia to decline for the season starting in July 2023. The company’s group managing director, Loi Tuan Ee, mentioned that they have observed indications of cost pressures easing, particularly in milk ingredient costs and feed costs.

To expand production capacity, Farm Fresh will commence production at its Taiping processing plant in June. This will enhance chilled milk production capacity and reduce logistics costs for supplying to the northern states of Malaysia. The Taiping plant will allow the Johor processing plant to focus on the Singapore market. Furthermore, the company has a new processing line operational at the Muadzam Shah Facility, which has helped alleviate capacity constraints, enabling them to focus on geographic expansion into the Philippines. They have recently secured a location for a new processing plant, slated to be operational by the second half of 2023. –TMR

Dayang Norazhar

Recent Posts

TikTok’s rules deter researchers from crunching data on users, misinformation

As TikTok gets more popular, researchers at leading academic institutions want to study what users…

15 hours ago

China hosts esports’ biggest moment with Tencent at the wheel

China scythed nearly $600 billion off Tencent Holdings Ltd.’s market value in its crackdown on…

15 hours ago

Goldman Sachs in talks with Malaysia to resolve latest 1MDB clash

Three years after Goldman Sachs Group Inc. agreed to fork over more than $5 billion…

16 hours ago

Concern mounts for ethnic Armenians in Karabakh

SHUSHA, AZERBAIJAN – Concern was growing for ethnic Armenians in Nagorno-Karabakh on Sunday as Azerbaijani…

17 hours ago

Ten-man Man City extend Premier League lead, Man Utd bounce back at Burnley

MANCHESTER – Manchester City moved five points clear at the top of the Premier League…

17 hours ago

MACC arrests former pol-sec to senior minister, company owner for alleged book printing graft

KUALA LUMPUR – A former political secretary to a former senior minister was one of…

1 day ago