KUALA LUMPUR (May 24): Dutch Lady Milk Industries Bhd saw its net profit for the first quarter ended March 31, 2021 (1QFY21) fall by 25.8% to RM16.88 million, from RM22.73 million a year ago, amid higher dairy prices and depreciation costs.
In a bourse filing, the group announced that its quarterly revenue increased by 3% year-on-year (y-o-y) to RM258.64 million, from RM251.17 million in 1QFY20.
The higher revenue was mainly driven by its liquid milk product portfolio. It noted that despite the continued Covid-19 challenges and remaining pressure on the Food Service business, it has been able to operate at full capacity.
The drop in net profit was attributed to negative mixes (channel and portfolio) and increased prices of global dairy raw materials.
It also noted that the accelerated depreciation of its assets at its Petaling Jaya factory that cannot be transferred to its new site, also impacted its bottom line.
On a quarter-on-quarter (q-o-q) basis, the group saw its net profit decline by 16.3% at RM16.88 million, from RM20.16 million in 4QFY20, while quarterly revenue declined by 10.6% to RM258.64 million from RM289.15 million.
No dividends were declared this quarter.
On its prospects, the group noted that the market remains volatile and is subject to various domestic and global uncertainties such as foreign exchange rate fluctuations, potential regulatory changes and the impact of Covid-19.
It noted that global dairy prices are also expected to stay high for the rest of the year.
“Despite these challenges, the company continues to focus on growing the consumption of milk among consumers. Over the longer term, the outlook for the company remains positive. The company has good leverage from the strength of its brands, the increasing need and recognition of the goodness and nutritional value of milk, as well as its complementing dairy products for Malaysians.
“The company will continue to support the local dairy farmers and increase the quantity and quality of local fresh milk. Dutch Lady is determined to invest in Malaysia, even in these trying times. In December 2019, we announced the plans to invest RM340 million between the years of 2021 and 2025 for our future manufacturing activities,” it said.
Shares in Dutch Lady Milk Industries closed 0.29% or 10 sen higher at RM34.20 today, valuing it at RM2.19 billion.
