Farm Fresh Berhad (Farm Fresh) reported a reduced profit before tax (PBT) and profit after tax and minority interest (PATAMI) by 58% to RM5.9 million and RM6.4 million respectively for the first quarter ended 30 June 2023 (Q1FY2024).
In comparison to the corresponding quarter, notwithstanding the higher revenues, the Group recorded lower profits due to the adverse impact of the escalating costs of dairy raw materials although the Group remains profitable.
However, in a sign that the Group’s profitability is turning around for the better, against the immediate preceding quarter, the Group has registered an improvement of 30% for both its PBT and PATAMI from the RM4.5 million and RM4.9 million recorded in the preceding quarter.
One of Malaysia’s leading dairy producers reported RM185.5 million revenue, its highest quarterly revenue to-date, representing an increase of 28.8% from RM144.0 million reported in the corresponding quarter of the previous financial year and a 14.9% growth from RM161.4 million against the immediate preceding quarter.
The higher revenue achieved was mainly due to the higher sales coming from the hotel, restaurant and cafe (“HORECA”) distribution channel, positive impact which stemmed from the launch of its latest product offerings as well as higher sales from the Group’s subsidiaries in Australia.
Farm Fresh group managing director and group chief executive officer Loi Tuan Ee’s said: “As we navigate through this current challenging operating environment, we are pleased that we are still able to continuously grow our revenues and market share as indicated by the revenue growth we’ve achieved. This is a testament of the execution of the growth strategies that we’ve undertaken as well as the strong brand recognition that we have built over the years with our emphasis on pure and high-quality ingredients.
“We have weathered through the period of heightened input costs for the past year and have continued to remain profitable. We now see several developments which are pointing towards a turnaround as far as input costs are concerned with the price of dairy raw materials gradually coming down.
“In anticipation of the recovery, we are still actively growing and expanding with our planned commencement of operations in Philippines and launch of our own growing up milk in powder form by end-2023. In addition to that, our recent completed acquisition of Inside Scoop will also pave the way for our entry into the consumer-packaged goods ice cream market, planned in early 2024.
“What’s more we have also commenced operations of our Taiping processing plant along with the installation of additional processing lines at Muadzam Shah facility to cater to the increasing demand of our products. The Taiping processing plant has freed up some capacity at our Larkin processing plant which will enable us to focus on our exports to Singapore which have already grown strongly over the last 3 years.”
The outlook for Farm Fresh remains positive given all the recent developments, and we remain optimistic towards what the future holds for the Group, he added.
