KUALA LUMPUR (May 19): Dutch Lady Milk Industries Bhd (KL:DLADY) warned that input costs may rise significantly from July onwards after the dairy company dodged Iran war fallout with record revenue.
Disruptions to global supply and demand balances caused by the conflict are expected to increase costs of energy, shipping and key inputs, Dutch Lady said in an exchange filing. Dairy raw material prices are also anticipated to trend upwards for the rest of the year, the company flagged.
Production costs and margins would be under pressure for the rest of the year, Dutch Lady said.
Net profit for the quarter ended March 31, 2026 (1QFY2026) rose 19.7% year-on-year to RM29.96 million, supported by stronger sales and lower commodity costs. During the same quarter a year earlier, expenses were also inflated by accelerated depreciation and transition-related one-off costs.
Revenue climbed to a record RM397.84 million, an increase of 6.5% when compared to RM373.40 million in 1QFY2025, driven by higher sales of its mainstay liquid milk range, stronger momentum in the out-of-home channel and continued growth from products launched in 2025.
Earnings per share increased to 46.8 sen from 39.1 sen previously. The dairy producer declared a first interim single-tier dividend of 30 sen per share amounting to RM19.2 million, payable on June 16, 2026.
Looking ahead, Dutch Lady expects demand for essential products to remain resilient, but cautioned that inflationary pressure and uncertainty from the blockade of the Strait of Hormuz could affect consumer confidence and spending power.
While an appreciating ringgit has helped cushion rising commodity costs, currency fluctuations remain a key operational risk.
"The company will continue its stringent management of raw material supply to ensure availability of its products to Malaysian consumers," Dutch Lady said. The company will also intensify focus on cost control to cut fixed expenditure and boost its working capital position, it added.
Dutch Lady shares closed up 20 sen or 0.61% at RM33 on Tuesday, giving the group a market capitalisation of RM2.11 billion ahead of the results announcement. Year to date, the stock has gained 5.9%.