Annoucement Date:
QUARTERLY REPORT FOR THE QUARTER ENDED | ||||
Financial Performance Discussion and Comment for Dutch Lady Milk Industries Berhad (Q3 2025)
The financial performance of Dutch Lady Milk Industries Berhad (DLMI) for the third quarter and nine months ended September 30, 2025, shows a significant recovery in profitability, primarily driven by the successful completion of its transition to the new Bandar Enstek manufacturing facility.
1. Performance Against Preceding Year Corresponding Period (Q3 2025 vs Q3 2024)
| Metric | Q3 2025 (RM'000) | Q3 2024 (RM'000) | Change (%) | 9M 2025 (RM'000) | 9M 2024 (RM'000) | Change (%) |
| Revenue | 374,515 | 355,452 | +5.4% | 1,123,518 | 1,079,097 | +4.1% |
| Operating Profit (Reported) | 39,371 | 21,830 | +80.4% | 108,083 | 88,543 | +22.1% |
| Profit After Taxation (PAT) | 32,055 | 17,221 | +86.1% | 80,483 | 65,916 | +22.1% |
| Basic EPS (sen) | 50.10 | 26.90 | N/A | 125.80 | 103.00 | N/A |
Revenue Growth: Quarterly revenue grew by 5.4% to RM374.5 million
. This growth was primarily driven by strong sales in the core Dutch Lady liquid milk range, continued momentum in the professional channel, and contributions from newly launched products . The market was also positively boosted by the one-off Sumbangan Asas Rahmah (Sara) assistance for Malaysian citizens . Reported Profit Surge: The massive increase in reported operating profit (+80.4%)
and PAT (+86.1%) is largely attributable to the cessation of accelerated depreciation expenses following the shutdown of the Petaling Jaya factory in October 2024 . Q3 2025 included only RM1.7 million in one-off transition-related costs
. Q3 2024 included RM13.2 million in accelerated depreciation and transition-related one-off costs
.
Adjusted Operating Profit: On a like-for-like basis, excluding one-offs and accelerated depreciation, operating profit still increased by 17.1% to RM41.0 million (Q3 2025) compared to RM35.0 million (Q3 2024)
. This underlying improvement was driven by higher revenue and favorable exchange rate movements .
2. Performance Against Immediate Preceding Quarter (Q3 2025 vs Q2 2025)
| Metric | Q3 2025 (RM'000) | Q2 2025 (RM'000) | Change (%) |
| Revenue | 374,515 | 375,606 | -0.3% |
| Operating Profit (Reported) | 39,371 | 33,940 | +16.0% |
| Profit After Taxation (PAT) | 32,055 | 23,396 | +37.0% |
Sequential Profit Growth: Despite flat revenue (-0.3%)
, reported PAT increased significantly by 37.0% . Cost Reduction: This strong sequential profit improvement was mainly due to a further reduction in one-off transition-related costs: from RM5.6 million in Q2 2025 to RM1.7 million in Q3 2025
. Underlying Strength: Excluding one-off costs, adjusted operating profit still grew by 3.7%
, driven by strong volume performance in liquid milk, lower dairy raw material costs, and favorable currency developments .
3. Financial Position and Cash Flow
Total Equity and Net Assets: Total Equity increased from RM501.9 million (31/12/24) to RM566.4 million (30/09/25)
. Consequently, the Net Assets per share improved from RM7.84 to RM8.85 . Cash Flow from Operations (9M): Net cash generated from operating activities more than doubled, increasing from RM29.7 million (9M 2024) to RM67.5 million (9M 2025)
. Investing Activities (9M): Net cash used in investing activities decreased from RM102.1 million to RM78.8 million
, which funded the continued capital expenditure for the new Distribution Centre in Enstek, which became fully operational in July 2025 . Borrowings: The company’s total borrowings remain within limits, utilizing an intercompany loan facility. As of Q3 2025, DLMI had drawn down USD22.1 million (RM92.6 million) from the available USD35 million facility to support capital investments
.
4. Comment on Performance
The Q3 2025 results mark a crucial turning point for Dutch Lady, moving beyond the heavy investment and high-cost phase of its transition project.
Successful Transition Payoff: The most significant comment is that the substantial year-on-year profitability increase is an immediate payoff from the successful closure of the legacy Petaling Jaya factory and the subsequent cessation of accelerated depreciation costs
. Strong Underlying Business: Beyond the accounting benefits, the underlying business is robust, demonstrated by the solid revenue growth and the 17.1% increase in adjusted operating profit for the quarter
. This indicates effective market strategy and brand strength . Financial Resilience: The company's enhanced operational cash flow and strong balance sheet position it well to navigate future challenges, having successfully self-funded a portion of its major capital investments
. Outlook: The outlook is cautiously optimistic
. While the company faces ongoing pressure from elevated commodity prices and increased costs from a wider scope of Sales and Services Tax (SST) on services , the operational efficiencies from the new IR4.0 facility and the favorable strengthening of the Malaysian Ringgit are expected to help offset these pressures . The company will continue to focus on optimizing costs and cash flow .
