Dutch Lady Milk Industries Bhd's pre-tax profit for financial year ended Dec 31, 2010 increased to RM90.1 million from RM82.5 million in the same period of 2009.

This was due to better sales mix and favourable exchange rates, it said in a filing to Bursa Malaysia today. Its revenue rose to RM710.6 million from RM691.8 million previously due to strong demand for the company's powder and drinks products.

For the fourth quarter ended Dec 31, 2010, Dutch Lady's pre-tax profit fell to RM15.9 million from RM20.3 million in the same quarter of 2009 due to lower sales and higher spending in marketing expenditure. Its revenue declined by 4.5 per cent to RM161.8 million from RM169.5 million previously.

Meanwhile, Dutch Lady managing director, Bas van den Berg, attributed the fourth quarter's performance to softer market conditions, rising raw material prices in the second half of 2010 and its efforts in managing stocks in the overall supply chain.

'2010 has been a challenging year globally with the food industries facing many uncertainties, having to contend with unpredictable external factors, especially when it comes to availability and prices of raw materials which have started to increase significantly in the second half of 2010,' he said in a statement

van den Berg said Dutch Lady was positive about its ongoing business performance in tandem with the country's forecast of six per cent gross domestic product outlook this year.

'However, we remain cautious given the soaring prices of raw materials like milk solids and sugar as well as energy costs, coupled with the uncertainties of the global climate,' he said. -- Bernama