Nestlé Malaysia’s 1Q earnings flattish


Nestlé (M) Bhd’s growth in revenue for the first quarter (1Q) was offset by higher commodity and marketing spending, which meant profit improved marginally.

The company made a net profit of RM231.22 million, or earnings per share of 98.6 sen, for the 1Q ended March 31, 2018 (1Q18), largely flattish compared to RM230.69 million net profit it posted in the same period last year.

Revenue climbed 4.4% year-on-year (YoY) to RM1.43 billion in the 1Q as domestic sales and exports rose 4.4% YoY and 3.4% YoY respectively.

Relevant product innovations with the right marketing and promotional support helped the group achieve high sales during the Chinese New Year (CNY) festive season, the group said in a statement yesterday.

The fast-moving consumer goods maker’s quarterly operating profit rose 1.3% YoY to RM303 million, with it noting that the bottomline performance was “satisfactory”, considering that 1Q17 was already on a high base.

“The improved turnover compensated for the less favourable commodity prices and higher marketing investments during the CNY period,” Nestlé Malaysia CEO Alois Hofbauer said.

Looking ahead, the local arm of the Swiss multinational expects the year ahead to remain challenging, but is confident with its long-term FIT strategy, underpinned by the three pillars of “Fuel to Grow”, “Innovate to Grow” and “Transform to Grow”.

Hofbauer noted that the strategy contributed to the growth in the 1Q, allowing it to improve efficiencies and strengthen productivity.

“We are confident our FIT strategy, brand portfolio, people and continuous focus on innovation will continue to contribute to our company’s sustainable and profitable growth,” he said.

Nestlé Malaysia will continue to strive for efficiency increases throughout its supply chain, and reinvest the realised improvements into the company’s growth by innovating and renovating its portfolio and intensifying its trade and consumer promotions.

Nestlé Malaysia’s shares closed 50 sen lower at RM147.50 yesterday, giving it a market capitalisation of RM34.59 billion.