Dairy craving in ASEAN propels Etika's 7.2% profit jump for FY2010

Profit attributable to equity holders rose from RM4.5 million to RM66.2 million due to increasing demand in dairy products from Malaysia, Vietnam and the Philippines.

The profit is on the back of a 12.8% increase in Group turnover to RM677.7 million.

Etika’s Group Chief Executive Officer, Dato’ Kamal Tan, said, “We are pleased to have achieved yet another record full year performance. This demonstrates the resilience and long-term sustainability of our business. The strategies adopted and the expansion plans that we have put in place for our core business segments continue to show positive results. We are very encouraged by this year’s results despite facing a very challenging business climate especially with the weakening of the US Dollar, and are excited about Etika’s future prospects.

“We will continue to integrate and synergise our processes, keeping a vigilant watch over our cost structure, looking for areas that will contribute towards improving operational efficiencies that will further enhance our profitability.”

Dato’ Jaya Tan, Group Chairman, said, “To thank our loyal shareholders for standing by us, the Board of Directors is proposing a one-tier tax-exempt final dividend of 1.25 Singapore cents per share.”

The Dairies Division has seen both revenue and volume growth in Malaysia and especially in ASEAN markets following the recent acquisition in Vietnam and strong demand from the Philippines market. In addition, the installation of a new sterilizer for the production of evaporated milk and juice milk drink in May 2010 resulted in increased production capacity of 30%. For the new financial year, there will be new mixing tanks installed in Q2FY2011. This will further increase the sterilized products and condensed milk capacity by 30% and 15% respectively.

Etika anticipates growth in the Frozen Food Division to be driven by the expansion in the Butchery and Bakery sub-divisions. Following the relocation of the Group’s Bakery sub-division to Meru, Klang in the beginning of this year, it is now in the midst of renovating and expanding the dry store, chiller and freezer stores, and showroom in Glenmarie, Shah Alam to increase the operation floor area for the Trading sub-division. The expected completion date is revised to mid 2011. This will allow the sub-division to be able to handle a much larger throughput.

Renovation for the Group’s Butchery sub-division will increase the production floor area where upon completion, the production capacity is estimated to increase by 50%. The renovation is expected to be completed in mid 2011.

“With the global economic recovery, market sentiment and consumer confidence has improved. We are cautiously confident that with our expansion and the recent acquisitions into complementary and synergistic businesses such as fresh baked bread and instant noodle businesses, there will be further growth opportunities for the Group and this shall put us in a good position to enhance our shareholders’ value,” Kamal Tan said.