Dutch Lady sees higher revenue, profit this year

Dutch Lady sees higher revenue, profit this year
By Vasantha GanesanPublished: 2010/05/20

DUTCH Lady Milk Industries Bhd (3026) expects to grow both revenue and net profit this year and to possibly pay as much dividend as it did in 2009.

In the year to December 31 2009, Dutch Lady posted a record net profit of RM60.4 million on the back of RM691.85 million in revenue.

The dairy manufacturer also paid a gross dividend of 86 sen per share in 2009, which translates to RM42 million in total.

Recently appointed managing director Sebastian Van Den Berg said the improving economy will be reflected in consumer behaviour and spending trend which he expects will contribute to the dairy market growth.
Moreover, the company will raise its advertisement and promotion budget this year to push sales.

"We will increase it by 20 per cent this year," Van Den Berg said a press conference following its annual general meeting in Petaling Jaya, Selangor, yesterday.

Dutch Lady saw its net profit jump by 41.6 per cent in 2009 compared with the previous year, supported largely by favourable skimmed milk powder price.

However, the price of the commodity, the main dairy raw material, is currently rising.

Van Den Berg expects the commodity's price to increase to over US$3,000 (RM9,720) per tonne this year compared with US$2,100 (RM6,804) in the fourth quarter of 2009.

The stronger ringgit will help cushion an increase as imports will be cheaper. Dutch Lady imports 95 per cent of its dairy needs.

Dutch Lady does not expect to raise the price of its products at least until August 2010.

"We are not sure yet. We will try our utmost best not to. But I can't promise that there will be no price increase ... not before August (at least)," he said.

Dutch Lady has forward purchased its skimmed milk needs that will last it until August or September this year.

On dividends, the group has announced a gross dividend of 45 sen per share. The remaining quantum will be announced later based on the performance of the company.

In the first quarter to March 31 2010, Dutch Lady saw net profit swell to RM20.81 million from RM8.75 million in the corresponding period of 2009.

Dutch Lady shares climbed 16 sen before closing at RM12.46 at the end of trading yesterday.

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