KUALA LUMPUR: Farm Fresh Bhd posted a lower net profit of RM4.89 million in the fourth quarter ended March 31, 2023 (4Q23) from net profit of RM17.68 million a year ago.
As for revenue, the dairy manufacturer registered an increase of 26 per cent to RM161.36 million from RM128.07 million a year ago.
Farm Fresh said this was due to the increase in Malaysian revenue by 15.2 per cent or RM18.3 million prompted by positive Ramadhan sales which further increased by the School Milk Program.
The company reported a lower earnings per share for Q4 of 0.26 sen against 1.08 sen a year ago.
For the cumulative period, Farm Fresh recorded a net profit of RM50.08 million from RM79.89 million.
According to its Bursa Malaysia filing, the company posted a full-year revenue of RM629.69 million, an increase of 25.5 per cent from RM501.92.
"The increase was mainly attributable to the increase in Malaysian revenue by 18.1 per cent or RM82.3 million driven by higher school milk sales, coupled with higher sales of our ready-to-drink (RTD) milk products and positive impact from launching of new products.
"Apart from that, Australian revenue also increased by RM45.5 million as compared to last financial year due to higher external sales from Goulburn Valley Creamery Pty Ltd," it said.
The company expects the farmgate milk prices in Australia to decline for the season beginning July 2023.
Group managing director and group chief executive officer Loi Tuan Ee said it was seeing a few indications that the cost pressures had started to ease.
"In particular, milk ingredient costs and feed costs are lowering down for us recently and in the coming second half of 2023."
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), the science and economics research division of the Department of Agriculture, Fisheries and Forestry of Australia, has forecast a reduction of farmgate milk price by 14 per cent for the July 2023-June 2024 season due to an expected reduction in export prices and stabilisation in milk production.
In terms of production expansion, Loh said its Taiping processing plant would begin production in June.
This will help improve Farm Fresh's chilled milk production capacity and reduce logistics costs to supply to the northern states.
"The Taiping plant will also allow us to focus our Johor processing plant to focus on the Singapore market where we have been doing very well over the years.
"In addition to that, we have a new processing line operational at Muadzam Shah Facility which has helped to alleviate our capacity constraints allowing us to focus more on our geographic expansion into Philippines whereby we have recently secured the location for our processing plant which is slated to be operational by the second half of 2023," he said.
