KUALA LUMPUR (Nov 10): Fraser & Neave Holdings Bhd (KL:F&N) said its integrated dairy business remains on track to break even within three to five years, with losses shrinking in the next two quarters of FY2026 as milk production rises.

The integrated dairy farm in Gemas, Negeri Sembilan, currently has 4,400 cows, with 2,500 pregnant heifers arriving this month to boost production. 

F&N said higher crop yields from locally grown corn, sorghum, and legumes will help cut feed costs and make its dairy operations more self-sustainable.

“The largest expense by far is feed. The success of F&N Agri Valley is very dependent on the crop farming part. So as our yields increase, and we grow more of our feed and we do not have to purchase that feed, whether it's locally here in Malaysia or feed at the import, that helps our bottom line. The milk yield is important, but crop yield and quality are equally important,” its chief executive officer Lim Yew Hoe said at a post-earnings briefing on Monday.

F&N’s dairy farm posted an operating loss of RM6.2 million for the year ended Sept 30, 2025 (FY2025), down from RM41.9 million in FY2024, as start-up costs were reclassified to the Food & Beverage Malaysia segment, with the farm’s official operations beginning.

Apart from fresh milk, Lim also said the group will explore opportunities related to the dairy segment, such as butter, cream, milk powder and yoghurt in the future.  

In terms of capital expenditure (capex) for the financial year ending Sept 30, 2026 (FY2026), its chief financial officer Tiong Yean Yiau said the group is planning to invest in a solar system and expand crop planting and barns to accommodate more cows for its dairy farm.

The group plans to maintain its dividend payout for FY2026, following a 65 sen dividend paid for FY2025.

F&N posted a net profit of RM508.47 million for FY2025, down 6.3% from RM542.77 million in FY2024, mainly due to higher foreign tax expenses from its Thailand subsidiary. Full-year revenue eased 0.9% to RM5.2 billion, from RM5.25 billion previously.

At noon market break on Monday, F&N's shares price rose RM1.12 or 4.06% to RM28.72, giving the group a market capitalisation of RM10.53 billion.

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