Softer Demand Conditions Lie Ahead For Alaska Milk

Philippine dairy producer Alaska Milk reported a 2% growth in its sales for the quarter ending September 2011, reflecting improving demand conditions in the domestic dairy market in recent months. In contrast, the company's margin performance was relatively lacklustre due to higher input costs. However, we do not expect raw material inflation to pose a persistent threat to Alaska Milk in 2012. Rather, we caution that softer demand conditions lie ahead for the company, which will inevitably weigh on topline growth.

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