Dutch Lady Milk Industries Bhd.MYX: DLADY

Fourth Quarter Report 2024

Feb 21, 2025 at 3:58 AM UTC · Issued by Dutch Lady Milk Industries Bhd.

DUTCH LADY MILK INDUSTRIES BERHAD (5063-V)

(Incorporated in Malaysia)

CONDENSED STATEMENT OF COMPREHENSIVE INCOME

For the financial quarter ended 31 December 2024

	INDIVIDUAL QUARTER	CUMULATIVE QUARTER
	CURRENT	COMPARATIVE	12 months		12 months
	QUARTER		QUARTER	TO DATE		TO DATE
	31/12/24	31/12/23		31/12/24	31/12/23
	(Unaudited)		(Audited)	(Unaudited)		(Audited)
	RM'000		RM'000	RM'000		RM'000
Revenue	365,974	364,531		1,445,071	1,442,823
Cost of Sales	(241,008)		(246,637)		(957,142)		(1,014,426)
Gross Profit	124,966	117,894		487,929	428,397
Other Income	4,628	17,680		7,347	18,620
Distribution Expenses	(50,779)	(33,611)		(197,385)	(170,160)
Administrative Expenses	(9,167)	(15,593)		(38,442)	(42,324)
Other Operating Expenses	(26,797)	(59,227)		(128,055)	(134,536)

Results from Operating Activities	42,851	27,143		131,394	99,997
Interest Income	120	298		367	1,024
Finance Costs	(1,511)	(1,222)		(6,716)	(4,528)

Profit Before Taxation	41,460	26,219		125,045	96,493
Income Tax Expenses	(10,730)	(3,393)		(28,398)	(24,099)

Profit After Taxation	30,730	22,826		96,647	72,394
Other Comprehensive Income	-	-		-	-
Changes in fair value of
cash flow hedge
Deferred tax on fair value of
cash flow hedge
Profit for the period/Total comprehensive

income for the period	30,730	22,826		96,647	72,394
Profit Attributable to:

Equity holders of the Company	30,730	22,826		96,647	72,394
Non-controlling interest	-	-		-	-

	30,730	22,826		96,647	72,394
EARNINGS PER SHARE

- Basic earnings per share (sen)	48.00	35.70		151.00	113.10
(Based on 64,000,000 ordinary shares)

(The Condensed Statement of Comprehensive Income should be read in conjunction with the Audited Financial Statements for the year ended 31 December 2023)

Page 1

DUTCH LADY MILK INDUSTRIES BERHAD (5063-V)

(Incorporated in Malaysia)

CONDENSED STATEMENT OF FINANCIAL POSITION

For the financial quarter ended 31 December 2024

		ASSETS
A01.	Pr	Property, plant and equipment
A01.	Ri	Right-of-use assets
A02.	In	Intangible assets
A09.	Ot	Other receivables
A01.	D	Deferred tax assets
		TOTAL NON-CURRENT ASSETS
A03.	In	Inventories
A04.	Tr	Trade and other receivables
A05.	Pr	Prepayments
A05.	Cu	Current tax receivable
A07.	Ca	Cash and cash equivalents
A06.	D	Derivatives financial assets
		CURRENT ASSETS

A08. A Assets classified as held for sale

TOTAL CURRENT ASSETS

TOTAL ASSETS

AS AT

31/12/24

RM'000

(Unaudited)

620,135

3,782

25,032

2,029

3,426

654,404

236,756

122,682

1,147

47,796

10,947

419,328

1,073,732

AS AT

31/12/23

RM'000

(Audited)

503,206

8,473

27,492

1,987

2,220

543,378

241,098

94,343

1,310

66,152

595

403,498

946,876

EQUITY

E01. Sh	Share capital
E02. Re	Retained profits
	Attributable to equity holders of the Company
	Non-controlling interest
	TOTAL EQUITY
	LIABILITIES
L07. No	Lease Liabilities
L01. De	Deferred tax liabilities
L03. Pr	Provision
L10. Bo	Borrowings
	TOTAL NON-CURRENT LIABILITIES
L02. Tr	Trade and other payables
L03. Pr	Provision
L05. Cu	Current tax liabilities
L06. Ba	Bank overdraft
L08. Cu	Lease Liabilities
L04. De	Derivatives financial liabilities
L10. Bo	Borrowings
	CURRENT LIABILITIES
	TOTAL LIABILITIES
	TOTAL EQUITY AND LIABILITIES
	Net assets per share attributable to ordinary
	equity holders of the Company (RM)

64,000

437,892

501,892

1,456

70,205

71,661

488,158

2,185

6,239

2,538

1,059

500,179

571,840

1,073,732

7.84

64,000

373,245

437,245

3,994

375

4,369

482,094

12,689

1,123

6,961

2,395

505,262

509,631

946,876

6.83

(The Condensed Statement of Financial Position should be read in conjunction with the Audited Financial Statements for the year ended 31 December 2023)

Page 2

DUTCH LADY MILK INDUSTRIES BERHAD (5063-V)

(Incorporated in Malaysia)

CONDENSED STATEMENT OF CHANGES IN EQUITY

For the financial quarter ended 31 December 2024

(The figures have not been audited)

					Attributable
			Distributable		to equity	Non-
	Share		Retained		holders of	Controlling
	Capital		profits		the Company	Interest	Total
	RM'000		RM'000		RM'000	RM'000	RM'000
12 months
ended 31 December 2024
Balance at
beginning of period	64,000	373,245	437,245	-	437,245
Movements
during the period	-	96,647	96,647	-	96,647
Dividend payable	-	-	-	-	-
Dividends paid	-	(32,000)	(32,000)	-	(32,000)
Balance at

end of period	64,000	437,892	501,892	-	501,892


					FALSE
12 months
ended 31 December 2023
Balance at
beginning of period	64,000	332,851	396,851	-	396,851
Movements
during the period	-	72,394	72,394	-	72,394
Dividend payable	-	-	-	-	-
Dividends paid	-	(32,000)	(32,000)	-	(32,000)
Balance at

end of period	64,000	373,245	437,245	-	437,245

(The Condensed Statement of Changes in Equity should be read in conjunction with the Audited Financial Statements for the year ended 31 December 2023)

Page 3

DUTCH LADY MILK INDUSTRIES BERHAD (5063-V)

(Incorporated in Malaysia)

CONDENSED STATEMENT OF CASH FLOW

For the financial quarter ended 31 December 2024

	12 months		12 months
	TO DATE		TO DATE
	31/12/24	31/12/23
	(Unaudited)		(Audited)
	RM'000		RM'000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers and other receivables	1,406,338	1,443,606
* Cash paid to suppliers and employees	(1,297,011)	(1,215,808)

Cash generated from operations	109,327	227,798
Income tax paid	(24,488)	(21,191)
Penalty paid	-	-

Net cash generated from/(used in) operating activities	84,839	206,607
CASH FLOWS FROM INVESTING ACTIVITIES

* Additions of property, plant and equipment	(128,089)	(189,308)
* Additions of intangible assets	(4,326)	(12,958)
Assets classified as held for sale	-	-
Proceeds from disposal of property, plant and equipment	-	476
Proceeds from disposal of asset classified as held for sale	-	-
Interest received	367	1,024

Net cash generated from/(used in) investing activities	(132,048)	(200,766)
CASH FLOWS FROM FINANCING ACTIVITIES

Borrowings raised	73,470	-
Finance costs paid	(1,120)	-
Interest paid	(4,256)	(4,041)
Dividends paid	(32,000)	(32,000)
Payment of principal portion of lease liabilities	(7,241)	(8,589)
Increase/(Repayment) of borrowings	-	-

Net cash generated from/(used in) financing activities	28,853	(44,630)

Net increase/(decrease) in cash and cash equivalents	(18,356)	(38,789)
Cash and cash equivalents brought forward	66,152	104,941

Cash and cash equivalents carried forward	47,796	66,152
Cash and cash equivalents consist of:

Cash and bank balances	47,796	66,152
Bank overdraft	-	-
Deposits placed with licensed banks	-	-

	47,796	66,152

*During the financial year, the Company has reclassified non-cash items relating to purchase of property, plant and equipment and trade and other payables

(The Condensed Statement of Cash Flows should be read in conjunction with the Audited Financial Statements for the year ended 31 December 2023)

Page 4

DUTCH LADY MILK INDUSTRIES BERHAD (5063-V)

(Incorporated in Malaysia)

NOTES

Basis of Preparation
The interim financial report is unaudited and has been prepared in accordance with the applicable disclosure provisions of the Listing Requirements of the Bursa Malaysia
Securities Berhad and MFRS 134, 'Interim Financial Reporting' in Malaysia and with IAS 34 'Interim Financial Reporting'. They do not include all of the information required for full annual financial statements and should be read in conjunction with the most recent audited financial statements of the Company as at and for the year ended 31 December 2023.
The accounting policies and methods of computation are consistent with those adopted in the most recent audited financial statements for the year ended 31 December 2023.
Auditors' Report of Preceding Annual Financial Statements
The auditors' report of the Company in respect of the annual audited financial statements for the year ended 31 December 2023 was not subject to any audit qualification.
Seasonal and Cyclical Factors
The dairy and dairy related business can be influenced by the weather and major festivals.
Unusual Items affecting Assets, Liabilities, Equity, Net Income or Cash Flows
There were no unusual items affecting assets, liabilities, equity, net income or cash flows during the financial period under review.
Changes in Estimates
Pursuant to the Company's announced investment in our future manufacturing activities,
DLMI has identified assets in its Petaling Jaya factory that will not be transitioned to the new site. In light of this, DLMI has implemented accelerated depreciation for the mentioned assets at the start of 2021 financial year, continuing into 2022, 2023 and 2024.
During the financial year, the Company has revised the useful lives of its assets. Effective 1 September 2024, the revised useful lives apply to new assets acquired as part of the transition to the new facility in Bandar Baru Enstek. Furthermore, the Company has reassessed the useful lives of plant and machinery as well as furniture and equipment in its existing facilities to align with their estimated economic useful lives, taking into account their transferability to the new facility.
The estimated useful lives for the current and comparative periods are as follows:

Description	2024	2023
Buildings	10 - 30 years	10 - 25 years
Plant and machinery	5 - 33 years	5 - 33 years
Furniture and equipment	5 - 15 years	5 - 10 years
Motor vehicles	5 years	5 years

Notes to the Financial Statements - Pg. 5

During the financial year, the estimated total useful lives of certain items of plant and machinery, furniture and equipment that were transferred to the new facilities were revised. The net effect of the changes in the current financial year was a decrease in depreciation expense of RM710,351. Assuming that the assets are held until the end of their estimated useful lives, depreciation in the future years in relation to these assets will be decreased by the following amounts:

Year ending 31 December:	RM'000
2025	1,586
2026	1,586
2027	1,557
2028	1,525

Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted as appropriate.

Other than the aforementioned, there were no other changes in estimates of amounts reported in the current quarter or changes in estimates of amounts reported in prior financial years that have a material effect in the current quarter.

Changes in Debt and Equity
There were no issuances and repayment of debt and equity securities, share buy-backs, share cancellations, shares held as treasury shares and resale of treasury shares for the financial period under review.
Segmental Analysis
The Company operates principally in Malaysia and in one major business segment. As such, only one reportable segment analysis is prepared. The Company's Board of Directors reviews internal management reports at least on a quarterly basis.

	Quarter ended	Quarter ended
	31/12/24	31/12/23
	RM'000	RM'000
Segment profit
Revenue	365,974	364,531
Profit/(loss) After Taxation	30,730	22,826
8. Capital Commitments
	As at	As at
	31/12/24	31/12/23
	RM'000	RM'000
Property, plant and equipment
Authorised but not contracted for	38,535	134,498
Contracted but not provided for	62,492	98,450
Notes to the Financial Statements - Pg. 5

9. Subsequent Events

There were no material subsequent events that will affect the financial results of the financial period under review.

Notes to the Financial Statements - Pg. 6

Changes in Composition of the Company
There were no changes in the composition of the Company during the financial period under review.
Related Party Transactions
The following are significant related party transactions: -

	Quarter ended	Quarter ended
	31/12/24	31/12/23
	RM'000	RM'000
Sales to related parties	599	359
Purchases from related parties	125,663	217,532
Know-how, Trademark License and Management	10,569	10,948
Support fees
Interest payment to related parties	1,051	-
Shared services from related parties	5,148	7,503
Advance payment to related parties	-	-

These transactions have been entered into in the normal course of business and have been established at arm's length.

Notes to the Financial Statements - Pg. 7

12. Review of Results (Against preceding year corresponding period)

	INDIVIDUAL QUARTER		CUMULATIVE QUARTER
	Current	Comparative	Changes	12 months	12 months	Changes
RM '000	Quarter	Quarter	TY vs LY	To Date	To Date	TY vs LY
	31/12/24	31/12/23	%	31/12/24	31/12/23	%
Revenue	365,974	364,531	0.4%	1,445,071	1,442,823	0.2%
Operating Profit (exclude Accelerated Depreciation and one-offs)	44,261	59,054	-25.0%	170,374	159,105	7.1%
Operating Profit	42,851	27,143	57.9%	131,394	99,997	31.4%
Profit Before Interest and Tax	41,340	25,921	59.5%	124,678	95,469	30.6%
Profit Before Taxation	41,460	26,219	58.1%	125,045	96,493	29.6%
Profit After Taxation	30,730	22,826	34.6%	96,647	72,394	33.5%
Attributable to Ordinary Equity Holders of the parent	30,730	22,826	34.6%	96,647	72,394	33.5%

*Accelerated depreciation and transition-related one-off costs in Q4 2024: RM1.4 million; Q4 2023: RM31.9 million

In the fourth quarter of 2024, DLMI reported revenue of RM366.0 million, an increase of 0.4% compared to the same period last year. Growth in revenue was predominantly driven by higher sales in our core range of UHT milk products and sales of the newly launched Dutch Lady "Sip & Seal" Packs. As part of the transition to the new manufacturing facility in Enstek, DLMI discontinued the production and distribution of some of our non-core Dutch Lady range of products in Q3 2024, which partly offset the growth in the core range compared to the same quarter last year. We will continue to collaborate with all our business partners to provide our consumers with high-quality, sustainable and Halal dairy nutrition in line with our purpose of Nourishing Our Planet and People in Every Stage of Life.

Revenue for the year landed well above RM1.4bn (RM1,445.1 million), a modest RM2.2m or 0.2% increase versus 2023. Revenue performance remained strong in our core portfolio of liquid milk and IFT products as well as our professional range with selective price increases on one of our product ranges, yet was impacted by negative market sentiment in the foodservice segment, the planned transition to the new facility in Enstek in Q3, as well the aforementioned discontinuation of some of the non-core products. DLMI remains steadfast and committed in ensuring that we provide the best nutrition offerings and the right portfolio to our business partners to achieve profitable growth and maintain a sustainable business. In line with this commitment, DLMI strategically prices its products to balance affordability with profitability to always meet consumer needs effectively while maintaining a strong market presence.

Operating profit for the quarter was RM42.9 million, up by 57.9% from RM27.1 million in the same quarter last year. The reported operating profit includes RM1.4 million in costs for accelerated depreciation and one-off expenses, down from RM31.9 million in Q4 2023. The production transfer to new state-of-the-art IR4.0 facility in Bandar Enstek was successfully completed in Q3 2024. Accelerated depreciation of assets, tied to the exit from the Petaling Jaya facility, stopped at the end of Q2 2024 as operations in the factory ceased in Q3 2024. Other transition costs remained with the ramp-up of production in the new facility and the ongoing construction of the dedicated Distribution Center at Bandar Enstek.

On a like-for-like basis, excluding the one-off expenses, the adjusted operating profit amounted to RM44.3 million, reflecting a 25.0% decline compared to the same period in 2023. This decline was primarily driven by variances in the mix of products sold and higher advertising and promotion investments to support new product launches and drive brand equity. These effects were partially offset by positive revaluation of currency hedges.

Profit Before Taxation amounted to RM41.5 million this quarter, compared to RM26.2 million in Q4 2023 as a result of the above-mentioned drivers. Profit After Taxation increased by RM7.9 million to RM30.7 million.

Notes to the Financial Statements - Pg. 8

13. Comments on Material Changes in Profit Before Taxation (Against immediate preceding quarter)

	Current	Preceding	Changes
RM '000	Quarter	Quarter	Q3 vs Q4
	31/12/2024	30/09/24	%
Revenue	365,974	355,452	3.0%
Operating Profit (exclude Accelerated Depreciation and one-offs)	44,261	35,042	26.3%
Operating Profit	42,851	21,830	96.3%
Profit Before Interest and Tax	41,340	19,186	115.5%
Profit Before Taxation	41,460	19,299	114.8%
Profit After Taxation	30,730	17,221	78.4%
Attributable to Ordinary Equity Holders of the parent	30,730	17,221	78.4%

*Accelerated depreciation and transition-related one-off in Q4 2024: RM1.4 million; Q3 2024: RM13.2 million

The company's revenue for the current period was RM366.0 million, a solid 3.0% increase compared to Q3 2024. Revenue growth in Q4 2024 is mainly driven by higher sales of liquid milk products including new products recently launched in the market. We will continue to collaborate with all our business partners to provide our consumers with high-quality, sustainable and Halal dairy nutrition in line with our purpose of Nourishing Our Planet and People in Every Stage of Life. DLMI remains steadfast and committed in ensuring that we provide the best nutrition offerings and the right portfolio to our business partners to achieve profitable growth and maintain a sustainable.

Operating profit for this quarter was RM42.9 million, an increase of 96.3% compared to the previous quarter. In line with the announced investment in our future manufacturing activities, DLMI applied accelerated depreciation of its assets in the Petaling Jaya factory that cannot be transitioned to the new site. The accelerated depreciation ceased at the end of Q2 2024, while other one-off operating costs related to activities for the construction and transition towards the new site have been incurred in the remaining quarters of 2024. The reported operating profit includes costs for accelerated depreciation and one-off costs amounting to RM1.4 million in Q4 2024, compared to RM13.2 million in Q3 2024.

Excluding one-off costs, operating profit for the quarter landed at RM44.3 million, an increase of 26.3% compared to Q3 2024. This increase is primarily attributed to higher revenue and positive revaluation of currency hedges (largely offsetting the negative effect in Q3 2024), partially balanced off by higher investments in advertising and promotion.

Profit Before Taxation for the quarter increased by RM22.2 million to RM41.5 million as a result of the above-mentioned drivers, whereas Profit After Taxation increased by RM13.5 million to RM30.7 million.

Notes to the Financial Statements - Pg. 9

14. Business Prospects

2025 Prospects
With the transition toward our new state of the art IR4.0 factory in 2024, DLMI embarked on a new journey that ensures we can nourish our nation for generations to come. In 2025 we continue on this journey, with expanded opportunities boosted by increased capacity and room for innovations, enabling DLMIs growth to continue and opening up new opportunities to nourish the people of Malaysia and enhance our position as the leader in dairy in Malaysia.
The business landscape in Malaysia is expected to face continued challenges due to a range of domestic and international uncertainties. These include geopolitical tensions, fluctuating foreign exchange rates, variable commodity prices, and potential changes in regulatory frameworks. It's unclear at this point if geo-political tensions will sustain or soften in 2025. The prices of raw materials may again be volatile. Lower supply of dairy may further drive the upward trend in the costs of these commodities, potentially impacting the cost base of the company. At the same time the MYR remains volatile amidst uncertainties on the global as well as domestic front. Regulatory changes and updates in tax legislation may also cause higher input costs. Therefore we continue to focus on cost competitiveness, for which we have designed a fit-for -purpose organization and have a global program in place to realise savings in our operations and supply chains network. DLMI will stay focused on its purpose of
'Nourishing Our Planet and People in Every Stage of Life'. In order to deliver on this purpose and to continue to invest behind our brands and people, healthy gross margins are essential. These assets will drive long term engagement with DLMI as an employer of choice and continue to increase penetration of milk.
DLMI is employing cash generated from its operations and working capital to fund the Property, Plant & Equipment (PPE) investments into the new production and distribution facility at Bandar Enstek. In the event of a shortfall in working capital, the Company has sufficient committed undrawn overdraft facilities and an inter- company credit facility that can be utilised. YTD Q4 2024, DLMI has drawn down USD15.6 million (RM73.5 million) of the available USD35 million (RM164.8 million) intercompany loan facility to further support these investments, ensuring we have the necessary financial resources to complete the transition to the new manufacturing facilities and the remaining construction of the Distribution Center. The construction of our Distribution Center next to the new manufacturing facility is well underway and expected to finalise in the first half of 2025.
The outlook for DLMI remains cautiously optimistic due to the strength of our brands, and the increasing need for and recognition of the goodness and nutritional value of milk amongst Malaysians. The Company will continue to support local dairy farmers, aiming to enhance both the quantity and quality of locally produced fresh milk.
DLMI will stay focused on its purpose of 'Nourishing Our Planet and People in Every Stage of Life'. In order to deliver on this purpose and to continue to invest behind our brands and people, healthy gross margins are essential. These assets will drive long term engagement with DLMI as an employer of choice and continue to increase penetration of milk.
Progress and steps to achieve financial estimate, forecast, projection and internal targets previously announced.
Not applicable.

Notes to the Financial Statements - Pg. 10

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