Apollo Food Narrows Focus Amid Raw Material Price Volatility.

Apollo Food Holdings remains cautious due to raw material price volatility, prioritizing strategic procurement and operational efficiencies to safeguard margins. Despite a 65.5% drop in Q3 net profit to RM10.4mil, revenue rose to RM75.8mil. For the nine months ended Jan 31, net profit fell 35.8% to RM30.7mil, while revenue increased 13.7% to RM225.1mil.

Apollo Food Holdings Bhd (AFHB), a prominent player in the Malaysian food industry, has expressed caution regarding the ongoing challenges posed by volatile raw material prices and operational inefficiencies [1]. Despite these hurdles, the company reported a revenue increase of 13.7% to RM225.1 million for the nine months ended January 31, 2025 [2].

The group, which specializes in compound chocolates, chocolate confectionery products, and cakes, has been proactive in mitigating these risks. In a recent statement, AFHB disclosed its commitment to fortifying its core operations and staying vigilant in navigating the uncertainties to deliver sustainable long-term growth [1].

AFHB's cautious stance is not new. In September 2022, the company warned of a challenging environment due to the uncertainties of raw materials costs, labor shortages, and related costs [3]. Despite these challenges, AFHB's financial performance has been resilient. For instance, the company reported a net profit increase of 6.7% year-on-year for the second quarter of 2024/2025, driven by higher domestic and export sales [3].

The company's financial health is further bolstered by its cash-rich position. As of October 31, 2024, AFHB was in a net cash position, with a net profit of RM10.62 million and revenue of RM77.34 million [3].

AFHB's strategic approach to managing raw material risks and improving operational efficiencies is commendable. The company's commitment to delivering sustainable long-term growth despite the challenges is a testament to its resilience and adaptability in an uncertain market.

References:

[1] The Star. (2024, September 23). Apollo Food Holdings remains cautious due to raw material price volatility. Retrieved from https://www.thestar.com.my/business/business-news/2024/09/23/apollo-food-adverse-price-fluctuations-of-raw-materials-remain-a-concern
[2] The Star. (2022, September 28). Apollo Food Holdings cautious about challenges ahead. Retrieved from https://www.thestar.com.my/business/business-news/2022/09/28/apollo-food-cautious-about-challenges-ahead
[3] The Edge Malaysia. (2024, December 4). Apollo Food Holdings' net profit grows 6.7% year-on-year for 2QFY2025. Retrieved from https://theedgemalaysia.com/node/736590