Dutch Lady Malaysia – Dutch Lady Milk Industries
Essay Preview: Dutch Lady Malaysia – Dutch Lady Milk Industries
Report this essay
Introduction
Dutch Lady Milk Industries Berhad (“Dutch Lady Malaysia”) is a leader in the quality branded dairy business in Malaysia. It was incorporated in 1963, and was the first milk company in Malaysia to be listed on Bursa Malaysia, the local Stock Exchange in 1968. Its holding company is Royal FrieslandCampina, a Dutch multinational corporation and one of the largest milk companies in the world.
DLM manufactures and sells a wide range of quality dairy products and fruit juices for the home and export market such as Infant Formula, Growing-up Milk, Powdered Milk, Condensed Milk, UHT Milk, Sterilised Milk, Pasteurised Milk, Cultured Milk, Yoghurt and Fruit Juice Drinks. The Companys dairy products have a strong consumer following and are represented by strong brands such as Dutch Lady, Frisolac, Friso, Completa, Omela and Joy.
Besides supporting local industries by using substantial amount of local ingredients in its products, DLM is also the largest purchaser of local fresh milk from the Veterinary Services Department. This is done via the Company Dairy Development Program, carried out in collaboration with the DVS with the assistance of the Netherlands Embassy.
Corporate Mission
Helping Malaysians move forward in life with trusted dairy nutrition.
Corporate Vision
To further strengthen our position as the leading dairy company, driving growth.
Financial Highlights
Revenue
Revenue is the amount of money that a company actually receives during a specific period, including discounts and deductions for returned merchandise. It is the “top line” or “gross income” figure from which costs are subtracted to determine net income. There is an increasing of Dutch Ladys revenue from RM 513650000 in year 2006 to RM 711567000 in year 2008, but slightly decrease in the year 2009 to RM 691847000 and in the year 2010 has increasing back to RM 710588000, which showing in the graph above.
Profit Before Tax
Profit before tax is the amount of profit that the company had earned before deducting the taxes. The graph has shown that Dutch Lady has an increasing of profit before tax from RM 59930000 to RM 64780000 between the year 2006 and 2007, but then decrease to RM 57858000 in year 2007. After that it has increase in both of the year 2009 and 2010 with the profit of RM 90104000 in year 2010.
Net Dividend Paid
Net dividend is the value of a dividend after the recipient has paid tax on it. In the graph above is showing that there is a slide increase in the year 2006 to year 2007, which is from RM 40416000 to RM 40944000. But, there is a fall in the year 2008 with the amount of RM 8320000, and it has increased back to a better figure in year 2009, which is RM 42000000 then increase to RM 46400000 in the year 2010.
Earnings per Share
The graph above showing Dutch Ladys earning per Share. It is the portion of a companys profit allocated to each outstanding share of common stock. Earnings per share serve as an indicator of a companys profitability. Its showing that the figure keep on fluctuating between the year 2006 and 2008 around the figure of RM 67000 and RM 74000. After that, it increase rapidly in the year 2009 to RM 94000 and slightly increase to RM100000 in year 2010.
Beta Analysis
Share Price
The graph on above is showing that the share price of Dutch Lady Milk Industry Berhad (DLM) from the year 2006 to the year 2010. It is showing that the share price has an obviously increase from RM 6.35 in the year 2006 to RM 12.20 in the year 2007. This is because of Dutch Lady has received Readers Digest Trusted Brands Gold Awards, where Malaysian consumers voted Dutch Lady as their preferred brand in milk products for 9 consecutive years in the year 2006. After that, there is just a slight increase in the year 2007 and maintain constant until Jun 2008 with the price RM 12.50. Then, it fall to RM 8.45 on October 2008. This is cause by global financial crisis, which is inflation on price for everything in the market. In the economical way, as most of the product from Dutch Lady has the price elasticity demand of elastic, its means that if the product selling price increase, the quantity demanded of the product would be decrease and the revenue will also decrease and vice versa. So, the increasing of price in the market has caused the decreasing of quantity demanded and this make the investors lose the trust of the company and make the companys share price fall. After that, the economic is started to resume in orderly and the price has growing up to RM 9.10 in year 2009. Then, according to the effective strategies that have done by the company, and gain back the invertors trust, the share price has increase to RM 11.90 in year 2010.
Ratio Analysis
Operating Margin
Operating margin also known as net profit margin used to measure a companys pricing strategy and operating efficiency and it is a measurement of what proportion of a companys revenue is left over after paying for variable costs of production
The graph on above show that DLM has an operating margin of 11.67%, which means, it makes almost RM 0.12 before tax and interest for every ringgit of sales in year 2006. But, it keeps on decreasing to RM 0.11 in 2007 and RM 0.08 in 2008. This may because the milk scandal mostly in China and Singapore, which founded that there is high contain of melamine in milks, which can caused increased kidney stones in babies and birth defects. This make the product have to off the shelves, and this has caused the production demand and then decreasing of profit and revenue. After the milk scandal has been slow down gradually, it has increasing back to RM 0.12 year 2009