KUALA LUMPUR (Feb 28): Farm Fresh Bhd’s net profit rose 8.91% to RM20.44 million for the third quarter ended Dec 31, 2023 (3QFY2024), from RM18.77 million a year before, on higher sales to hotels, restaurants, and cafes (Horeca), as well as better sales of ultra-high-temperature (UHT) processed products. 

Earnings per share came in at 1.09 sen for 3QFY2024, from 1.01 sen a year earlier, the dairy producer showed in a bourse filing on Wednesday.

Recently acquired ice cream units The Inside Scoop Sdn Bhd and Sin Wah Ice Cream Sdn Bhd also contributed to the higher quarterly profit.

Segment-wise, the group's Australian operations turned to loss, which was more than offset by improvements in Malaysia.

Quarterly revenue increased 30.5% to RM211.62 million, from RM162.17 million a year ago.

For the cumulative nine months ended Dec 31, 2023 (9MFY2024), net profit fell 12.37% to RM39.6 million, from RM45.19 million previously, while revenue gained 27.13% to RM595.38 million from RM468.33 million.

The group blamed the lower 9M earnings on higher administrative costs, including salary and depreciation costs, with the acquisition of the ice cream units.

The cumulative earnings were also dragged down by higher finance costs due to higher borrowings to fund the group's expansion, and higher taxation on Inside Scoop and Sin Wah, which did not enjoy any tax incentives. The Australian business' net loss widened for the period, the filing showed.

On its prospects, Farm Fresh said the group is in the final stages of launching its consumer packaged goods (CPG) ice cream, aiming to launch in June.

“Other categories we are entering this year are butter, which will be produced at the Taiping plant, focusing on both Horeca and modern trade, and cultured milk to be produced at our Larkin plant,” it added. 

As for the plant in the Philippines, Farm Fresh expects to have the factory operational after receiving the required licences and registrations by May.

“We are planning to have our chilled products, UHT products, and growing-up milk powder sold in the Philippines, focusing first on the Greater Manila market,” it said.

At Wednesday's noon break, Farm Fresh shares were two sen or 1.4% lower at RM1.41, giving the group a market capitalisation of RM2.64 billion.