Dutch Lady reported its third-quarter financials with revenue growth of 10.4% to RM372 million, compared to the same period last year when revenue stood at RM337 million.
Profit Before Taxation in the current quarter landed at RM25.3 million (-19.4%) versus RM31.4 million in 2022, whereas Profit After Taxation was lower by 31.2% to RM16 million versus Q3 2022 at RM24.4 million. This includes a tax phasing correction over 2022, related to the treatment of provision for restructuring costs taken in 2022, negatively impacting Net Profit in Q3 2023 by RM3.1 million.
On a like for-like-basis Operating Profit excluding accelerated depreciation and one-offs is RM44.4 million, meaning a 22.4% increase versus the same quarter in 2022. This increase is mainly driven by softening costs of dairy raw materials in Q3 2023 vs Q3 2022, as well as the implementation of cost optimization and revenue growth management measures to
offset the devaluation of the Malaysian Ringgit especially against the USD.
DLMI said it continues the accelerated depreciation of its assets in the Petaling Jaya factory that cannot be transitioned to the new site. As the construction of the state-of-the-art IR4.0 manufacturing facility in Bandar Enstek progresses, other one-off operating costs related to activities for the construction and transition towards the new site are incurred. These costs for accelerated depreciation and one-offs are included in the reported Operating Profit amounting to RM18.3 million. These one-off results negatively impact the Operating profit which declined by 18.5% (RM6.0 million) vs. Q3 2022.
DLMI is employing cash generated from its operations and working capital to fund the Property, Plant and equipment (PPE) investments into the new production facility at Bandar Enstek. Should there be any short-term shortfall in working capital, the Company has sufficient committed undrawn overdraft facilities and an inter-company credit facility that can be utilised.
Over the long term, the outlook for DLMI remains cautiously optimistic due to the strength of its brands, and the increasing neednutritional value of milk amongst Malaysians.
