Core Market Tied Farm Fresh Posts Net Profit of RM11.46m in 3Q22

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KUALA LUMPUR (March 18): Main Market-linked Farm Fresh Bhd saw its net profit for the third quarter ended December 31, 2021 (3QFY22) fall 24.13% to RM11.46 million, from 15, RM1 million in 3QFY21 due to lower income, as well as higher feed and transport costs.

The decline was also attributed to listing fees related to the group’s initial public offering (IPO) exercise and operating losses at its Australian subsidiary, Henry Jones Foods Pty Ltd’s IXL fruit jam business. , which has been reduced in the current fiscal year, he noted in a public filing Friday, March 18.

Earnings per share slipped to 0.7 sen from 0.82 sen a year earlier.

The dairy specialist recorded revenue of RM116.67 million, down 9.26% year-on-year from RM128.57 million. Farm Fresh said the decline in revenue was due to the overall impact of the prolonged Covid-19 pandemic, leading to lower economic activity, consumer confidence and household income levels in Malaysia, as well as the cessation of sales of raw milk by the group’s Australian farm. to third parties since the end of September 2021.

“Since then, following the completion of our Kyabram facility in October 2020, milk produced by our Australian farm has been supplied internally for our dairy production and subsequent sales, reducing the raw milk needing to be sourced locally. outside,” he added.

For the nine months ended December 31, Farm Fresh’s net profit jumped 154% to RM62.2 million from RM24.49 million, while nine-month revenue increased by 2. 99% to reach RM373.85 million from RM362.99 million. EPS has increased to 3.8 sen from 1.5 sen a year ago.

“Revenue growth was primarily driven by an increase in market share of the ready-to-drink (RTD) milk category from 15% in December 2020 to 18% in September 2021, attributable to higher recruitment of new customers, to increased sales of its dairy RTD and new product launches during the fiscal year,” Farm Fresh said.

Despite the challenging environment posed by the Covid-19 pandemic, inflationary pressures from rising input prices and, more recently, the uncertainties caused by the Russian military invasion of Ukraine, Farm Fresh said that it remained confident of achieving long-term growth in sales, market share and profitability in the fast-growing dairy segments in which it competes.

“Specifically, our planned launch of Growing Up Milk based on a fortified fresh milk formula, which will compete with both infant milk powder and ready-to-drink reconstituted milk products, will allow us to further stimulate growth. through our culture of innovation and a commitment to producing healthier products for our growing children,” Group Managing Director and Chief Executive Loi Tuan Ee said in a separate statement.

In the short term, the group is focused on completing and operationalizing its Taiping farm and processing plant, an additional filling and packaging line at the Muadzam Shah plant and the UPM farm processing facility, which will increase annual production capacity by 29.8 million litres. by 2022.

With the completion of the Taiping processing plant, capacity at the Larkin processing plant can be freed up for exports to Singapore, Farm Fresh said.

In addition, the group intends to launch its regional expansion with its planned entry into Indonesia, the Philippines and Hong Kong.

Farm Fresh is expected to be listed on Bursa’s main market next Tuesday (March 22). The market capitalization of the group is approximately RM2.5 billion based on the final retail price of RM1.35 and its expanded share capital of 1.86 billion shares at listing.

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