KUALA LUMPUR (Aug 28): Farm Fresh Bhd’s (KL:FFB) net profit grew fourfold to nearly RM26 million or 1.39 sen per share in the first quarter ended June 30, 2024 (1QFY2025), from RM6.37 million or 0.34 sen per share a year ago, as significantly higher sales were bolstered by decreased costs.

It did not declare any dividend during the quarter under review.

The group recorded a more than two-fold increase in gross profit to RM72.9 million in 1QFY2025, and gross profit margin had improved from 17.7% to 30.2%, due to reduction in costs of dairy raw materials, impact of increase in prices for chilled ready-to-drink (RTD) products and certain ultra-high temperature (UHT) products in Malaysia effective mid-July 2023.

Profits were also boosted by contributions from its Inside Scoop and Sin Wah ice cream outlets, as well as improving margins from its Australian operations.

Revenue rose 30% to RM241.7 million, from RM185.46 million a year ago, according to its Bursa Malaysia filing on Wednesday.

During the quarter under review, revenue from Malaysia’s operation increased to RM203.5 million, from RM149.8 million in 1QFY2024 underpinned by sales contribution from new products, higher sales from its HORECA (hotel, restaurant, and café/catering) distribution channel, as well as full quarter contributions from its Inside Scoop and Sin Wah businesses.

Farm Fresh noted that its Australian revenue also increased by 7.2% or RM2.6 million, driven by increasing external sales from Goulburn Valley Creamery Pty Ltd.

In a separate statement, Farm Fresh group managing director and group chief executive officer Loi Tuan Ee said the group expects to see continuous growth coming from its products, such as the Farm Fresh Grow in powder format.

“Paired with our newly launched chocolate malt product, we expect this to spur a new growth catalyst for the group, enabling us to penetrate new market segments to further grow our total addressable market,” he added.

Loi said Farm Fresh also plans to expand its product offerings to include butter and cultured milk products to its product line-up, and introduce them in the “next few months”.

The group’s regional expansion has taken shape in the Philippines, where it expects its factory to start operating by the end of August 2024, he said.

“This will allow us to introduce our chilled, ultra-high temperature, and growing-up milk powder products to the Greater Manila market.

“As for Australia, we have posted a turnaround this quarter, driven by higher revenues from Goulburn Valley Creamery.

We expect our Australian results to continue to improve, following the reduction in season farmgate prices by about 11% beginning July 2024,” he added.

Farm Fresh's share price gained 3 sen or 1.9% to close at RM1.60, valuing the group at nearly RM3 billion.