Farm Fresh's Q1 net profit slides 18pct on rising costs

KUALA LUMPUR — Farm Fresh Bhd reported a 18.2% drop in net profit for the first quarter of FY27, reaching RM26.82 million, down from RM32.8 million in the same period last year. The decline was attributed to increased distribution costs from expanded exports to Cambodia and the Philippines, higher payroll expenses due to workforce growth, and increased finance expenses from the drawdown of its sukuk programme.

Revenue, however, grew 17.6% to RM306.37 million from RM260.58 million, driven by stronger Malaysian sales supported by elevated mini-market and e-commerce sales, as well as increased exports to Cambodia and enhanced sales in the Philippines. Earnings per share fell to 1.42 sen from 1.75 sen. Farm Fresh's managing director and CEO, Loi Tuan Ee, highlighted the company's ongoing category and regional expansion initiatives, as well as measures to tackle rising input and operating costs, such as increased pricing, alternative sourcing, and operational efficiency.

The company is also transitioning to liquefied natural gas (LNG) at its Muadzam Shah farm, which could cut fuel costs by up to 50% and slash pollution. Looking ahead, Loi expressed confidence in the group's long-term growth prospects despite ongoing geopolitical uncertainties and elevated input costs, attributing this to proactive steps and the expansion of regional operations, production capacity, and product portfolio.