KUALA LUMPUR (Feb 25): Dutch Lady Milk Industries Bhd reported today a 12% year-on-year fall in its fourth quarter net profit to RM26.67 million from RM30.30 million, which it blamed on its pricing strategy, higher raw material prices and a negative exchange rate impact.

The effects of these could not be completely offset by the 3.9% rise in revenue to RM281.76 million in the three months ended Dec 31, 2019 (4QFY19), from RM271.15 million previously, which was driven by higher domestic milk consumption.

For the full FY19, Dutch Lady’s net profit sank 20.5% y-o-y to RM102.96 million from RM129.45 million, despite posting marginally higher annual revenue of RM1.07 billion versus RM1.05 billion previously.

In a stock exchange filing, the group said it recorded a 9.3% volume growth in 4QFY19 and 6.2% for FY19, driven by its innovations, which had focused on occasions and affordability.

The volume growth is in line with its ambition to increase consumption of milk in Malaysia and uplift the health status of Malaysians, it said.

It said the outlook for 2020 is expected to stay volatile, as the economic slowdown is expected due to various domestic and global uncertainties, foreign exchange uncertainties and regulatory changes, if any.

“The global dairy price is expected to increase in 2020 versus 2019. In this challenging market, Dutch Lady will stay focused on building the long-term future, driven by our purpose to ‘Nourish Malaysians’.

“At the same time, Dutch Lady will continue to put efforts to improve operational efficiency to stay agile and adapt to macroeconomic changes,” it added.

Shares in Dutch Lady settled two sen higher today at RM44.50, valuing the group at RM2.85 billion.