KUALA LUMPUR (May 27): Dutch Lady Milk Industries Bhd is cautiously optimistic of repeating its financial year 2014 (FY14) topline performance of RM1 billion in the current financial year (FY15), despite prevailing weak consumer sentiments in the market.

Like any other countries that have implemented consumption taxes similar to the goods and services tax (GST), Dutch Lady managing director Saw Chooi Lee said she expects Malaysia to see a few more months of weak consumer sentiment, before easing.

"We will look for the next three to six months. What we would like to continue to do is leverage on the strength of Dutch Lady, because it is a brand that has been in Malaysia for over 50 years. We will continue to stay close to, and focus on giving value back to our Malaysian consumers," she said.

Saw said she is hoping that the group will be able to maintain its RM1 billion revenue for FY15, though she refrained from making any guarantees.

"It is a challenging environment. But I think we have a few things that will help us remain cautiously optimistic. One, we have the relaunch of two new products. Secondly, we have a very strong Dutch Lady brand.

"And remember we are in the category of nutrition. We want to educate out consumers to spend their money in the right places. We believe we can stay close to consumers and remind them about our nutritious and high quality products. So yes, we have that ambition to continue to grow and maintain the Dutch Lady brand," she told reporters, after the group's annual general meeting today.

The two new products are namely the Dutch Lady PureFarm and the improved Dutch Lady Children Formula Milk.

Additionally, Saw said the group has allocated RM18 million for capital expenditure, which will be used to improve product quality and increase efficiency. 

She also said the group has no plans to increase prices to combat increasing operating costs.

"We want to remain competitive with the market, but will respond to the environment."

Dutch Lady saw a 26.2% drop in net profit to RM17.03 million or 26.6 sen a share for its first quarter ended March 31 (1QFY15), from RM23.07 million a year ago, on lower revenue and increased marketing investments to support its relaunch activities.

Revenue for the quarter fell 13.5% to RM196.89 million, from RM227.68 million in 1QFY14, due to the rundown of activities prior to the relaunch of its Dutch Lady Children Formula Milk.

As at 2:46pm, Dutch Lady (fundamental: 2.1; valuation: 1.5) fell RM1.30 or 2.78% to RM45.50, for a market capitalisation of RM2.91 billion. It was the top decliner across the local bourse today.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)