F&N expects AgriValley to need several more years to break even
The group is focusing on productivity and cost efficiency at its Gemas dairy farm before pursuing a larger expansion.
Fraser & Neave Holdings Bhd expects several more years of operations before its F&N AgriValley dairy farm reaches break-even, chief executive officer Tarang Gupta said, without setting a target date.
Speaking at the group's financial results briefing on Nov 6, Gupta said operational stability at the Gemas, Negeri Sembilan farm would take priority over faster expansion. He did not confirm whether equity analysts' earlier expectation of break-even by 2028 remained achievable.
Gupta said the path to profitability depends on milk output, herd growth, breeding, feed expenses and weather. AgriValley has approximately 8,000 cattle, with about 3,000 producing milk, while work continues to improve breeding cycles and lower feed costs.
Farm operating expenses weighed on the Malaysian business. Its operating profit dropped 80.2% to RM15.84 million for the quarter ended Sept 30, 2026, compared with RM79.94 million a year earlier. Revenue increased 0.9% to RM737.82 million.
For FY2026, weaker earnings from AgriValley and disruptions in Indochina contributed to group net profit falling 14% to RM437.09 million. Group revenue declined 5.3% to RM4.92 billion.
F&N has started harvesting animal-feed crops, but Gupta said weather changes have made production inconsistent. Feed is the farm's biggest variable expense, while greater milk output would spread fixed costs across more production.
Gupta said existing infrastructure could accommodate more cattle. Further investment would be phased, rather than involve another large upfront commitment, with more farming and breeding cycles needed to assess long-term profitability.
