Dutch Lady 2Q net profit up 24% on higher demand, lower commercial spend

KUALA LUMPUR (Aug 24): Dutch Lady Milk Industries Bhd’s net profit rose 23.5% to RM21.23 million in the second quarter ended June 30, 2020 (2QFY20), from RM17.19 million a year ago, driven by higher demand for its products and lower and efficient commercial spend.

This resulted in a higher earnings per share of 33.2 sen for 2QFY20 compared with 26.9 sen for 2QFY19.

In a bourse filing today, Dutch Lady said 2QFY20 earnings were, however, partially impacted by negative mix (channel and portfolio) and increased global dairy raw material prices.

Revenue for the quarter increased 12.3% to RM273.52 million from RM243.61 million a year ago. "Despite the Covid-19 situation, the company has been able to operate at full capacity," it said.

However, the group saw its net profit fall 13.9% to RM43.97 million in the cumulative six months (1HFY20) from RM51.09 million a year ago, even though revenue increased 3.2% to RM524.69 million versus RM508.59 million a year ago.

On prospects, Dutch Lady said in the current volatile situation both globally and in Malaysia due to the impact of Covid-19, it will continue to focus on increasing the consumption of milk among Malaysian consumers, as well as efficiency improvement initiatives throughout the company.

"Over the long term, the outlook for the company remains optimistic. The company has good leverage from the strength of its brands, the increasing need and recognition of the goodness and nutritional value of milk, as well as its complementing dairy products among Malaysians," it added.

Dutch Lady shares closed 0.26% or 10 sen lower at RM38.80 today, bringing a market capitalisation of RM2.48 billion. Its share price has fallen 39% over the past year from RM63.90.

(Editing by Kang Siew Li)