PETALING JAYA: Farm Fresh Bhd
's shares hit an all-time low yesterday following concerns over a recent announcement of supply constraints in the Australian milk industry.
At 5pm, Farm Fresh closed down five sen or 4.2% to RM1.14.
In a filing with Bursa Malaysia, Farm Fresh said rumours had been circulating on the company, drawing on the recent announcement by Australia’s Bega Group on the decline in Australian milk production.
Farm Fresh said the decline in production had resulted in intense competition for raw milk, leading to Bega Group expecting a decline in performance and an expected non-cash impairment in the range of A$180mil to A$280mil (RM560mil to RM871mil) in its audited results (subject to finalisation).
“While Farm Fresh is also impacted by the less-than-expected decrease in farmgate milk prices in Australia, as we do purchase milk from third party farmers in Australia, we are much less impacted compared to Bega Group.
“Bega Group exclusively purchases 100% of its milk requirements from farmers in Australia whilst our purchase of milk ingredients from third party farmers in Australia is expected to account for approximately 14% of our total milk ingredients.”
Farm Fresh said this was equivalent to more than 100 million litres in the financial year ended March 31, 2024.
“Additionally, 70% of the raw milk used by us comes from our own farms in both Malaysia and Australia.
“We continue to take into account various factors in determining our investments in our upstream, midstream and downstream operations, the input costs and variations that occur from time to time, to ensure we do not depend heavily on any specific milk ingredients source.”
