KUALA LUMPUR: Farm Fresh Bhd's share price continued to fall in early trade today after a voluntary statement on unusual market activity by the company said it will see some impact from intense competition for raw milk from Australia.
Farm Fresh's share price fell as much as 4.3 per cent or 5 sen to a low of RM1.09 before recovering some its losses and trading at RM1.1 as at 11.07am. Year to date, the company's share price has fallen 32 per cent.
Yesterday, Farm Fresh said unusual market activity in its shares and rumours on the company were drawn from a recent announcement by Bega Group expecting a decline in performance and non-cash impairment in the range of AUD180 million to AUD280 million in its audited results (subject to finalisation) due to intense competition for raw milk out of Australia.
"While Farm Fresh is also impacted by the less then 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," it said.
The company said its purchase of milk ingredients from third party farmers in Australia accounts for about 14 per cent of total milk ingredients, equivalent to more than 100 million litres for the financial year ending 31 March 2024. "Additionally, 70 per cent of the raw milk used by us comes from our own farms in both Malaysia and Australia," Farm Fresh said.
The company said it continues to take into account various factors to determine investments in upstream, midstream and downstream operations, the input costs and variations that occur from time to time, to ensure that it is not heavily dependent on any specific milk ingredients source.