KUALA LUMPUR: Farm Fresh Bhd made a voluntary statement to Bursa Malaysia Securities to clarify unusual market activity prompted by steep declines in its share price since May 30.
Farm Fresh said rumours had been circulating on the company, triggered by the recent announcement by Australia's Bega Group on the decline in Australian milk production.
Bega Group was expecting a decline in performance with a potential non-cash impairment in the range of A$180 million to A$280 million in its audited results (subject to finalisation).
"While Farm Fresh Bhd 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 per cent of its milk requirements from farmers in Australia while our purchase of milk ingredients from third party farmers in Australia is expected to account for approximately 14 per cent of our total milk ingredients.
"This is equivalent to more than 100 million litres in the financial year ended March 31, 2024," it said in a statement.
Additionally, Farm Fresh said 70 per cent of the raw milk used by it comes from its 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.
"This will ensure we do not depend heavily on any specific milk ingredients source," it added.
The company's share price has shed some 26 per cent of its value since May 30.
It closed at an all time low of RM1.14, well below its reference price of RM1.35, Tuesday.