KUALA LUMPUR (May 24): Farm Fresh Bhd is to increase the prices of its chilled ready-to-drink (RTD) products in mid-July this year by an average of 5%.

In a filing on Tuesday (May 24) in regards to its financial results for the fourth quarter ended March 31, 2022 (4QFY22), the dairy product specialist said the slated move was induced by the challenging environment it operates in — posed by inflationary pressures from higher input prices and economic uncertainties caused by the Russian military invasion of Ukraine.

“Given the long-term nature of the headwinds faced by the group and to counter the higher input prices, the group is increasing prices for its chilled RTD products in Malaysia effective mid-July 2022 by an average of 5% and increasing prices for its chilled RTD products in Singapore by an average of 8% effective Aug 1, 2022,” it said.

According to Bloomberg, milk futures have risen 40.9% over the span of a year.

Last year, the group had already imposed a 5% price increase on chilled RTD milk products and ultra-high temperature processing RTD products in September and December, respectively. 

Prior to the price increase last year, the group had not raised prices for four years.

However, last year’s price hikes augured well for Farm Fresh, as its net profit was boosted by a higher gross profit margin, despite its quarterly revenue only increasing marginally.

For 4QFY22, the group’s net profit surged 50.63% to RM17.68 million from RM11.74 million a year ago, while its quarterly revenue was up 0.44% to RM128.07 million from RM127.51 million.

It noted that its gross profit margin improved from 27.6% to 28.6% a year ago.

Farm Fresh closed down one sen or 0.59% at RM1.68 on Tuesday, giving it a market capitalisation of RM3.12 billion.