KUALA LUMPUR: Farm Fresh Bhd
is cautiously optimistic of its regional expansion and financial performance in the coming financial year as it acknowledges several headwinds, especially those blowing from the Middle East.
According to the dairy products group, the disruption of shipping lanes in the Middle East has resulted in a shortage and price increase of plastic bottles made from high-density polyethylene (HDPE) resin, which relies on naphtha shipped from the Middle East.
To mitigate the impact, the group has increased its gable top paper cartons production to make up for the lack of plastic bottles, and sourced for HDPE resin from China.
The group also plans to increase prices by about 3% for selected plastic bottle products in Malaysia, and about 10% for Singapore, effective early June 2026.
Farm Fresh ended its 2026 financial year (FY26) with a net profit of RM129.61mil, which was higher than RM106.4mil posted in the previous year.
Its annual revenue of RM1.12bil was also an increase from RM981.18mil in FY25.
However, the group's fourth quarter showed a dip in earnings to RM27.9mil from RM28.35mil in the same quarter last year.
It said this was owing to higher distribution costs resulting from increased school milk sales, accompanied with the freight costs arising from exports to Cambodia and Philippines.
Additionally, there were higher salary costs due to increased headcount to support new Inside Scoop outlet openings and business expansion.
The one-off year-end adjustments to advertising and transport costs by the Philippines operation also contributed to the decrease.
Apart from that, the group recorded a fair value
loss on valuation of biological assets of RM400,000 as opposed to RM1.2mil fair value gain in the corresponding quarter.
On topline, the group posted quarterly revenue of RM275.12mil as compared to RM243.73mil in the previous corresponding quarter, as its Malaysian revenue was fuelled by higher mini market, e-commerce and school milk sales.
"Additionally, higher exports to Cambodia, stronger sales in Philippines and the positive sales contribution from launching of new products i.e. Butter, AusFresh, and Farm Fresh Full Cream Milk Powder further contributed to the growth.
"The increase was partly offset by a decrease in Australian revenue due to lower export deliveries," it said in a results filing to the stock exchange.
