'Malaysians don't drink milk anymore?'
Farm Fresh Bhd highlighted low fair value gains from valuation of biological assets and rising costs as the main drag on the company's profits in its 2nd quarter (Q2) corporate earnings report.
According to the filing of the Q2 report ending September 30, the low fair value gain from valuation of biological assets was down at RM200,000 compared to RM10.5 million recorded in the same period last year.
The decrease was due to high gross losses, value losses and redundancy costs of RM7.1 million from the jam business from IXL fruit this quarter.
In addition, high sales and distribution costs from the overall sales incurred for the School Milk Program (SMP) run by stockists including large marketing expenses also contributed to the fall.
In the meantime, the details of the report show that earnings per share fell by 0.6 sen from 1.93 sen and the company declared a dividend of RM1.07.
Among other important data are,
Quarterly revenue was up 32.46% at RM162.14 million from RM122.4 million.
Revenue in Malaysia jumped 25.3% to RM27.3 million while revenue in Australia jumped 86% or RM12.4 million.
For the first half period ending 30 September 2022 (1HFY22), net profit fell 47.93% to RM26.42 million from RM50.74 million despite a 19.04% increase in revenue at RM306.16 million from RM257.19 million.
Operating profit and profit before tax decreased by RM7.9 million due to employee share option scheme expenses of RM4.1 million.
Going forward, Farm Fresh plans to launch Farm Fresh Grow milk formula in October and Yarra by Farm Fresh milk powder in November.
Also expected, Farm Fresh plans business expansion to the Philippines including frozen milk products as well as the construction of a factory in Taiping to reduce logistics costs and increase production capacity.
As of this writing, Farm Fresh shares are down 0.64% at RM1.56.
