Nestlé’s 3Q19 earnings up 8.2% to RM149m, proposes 70 sen dividend

New innovations launched during the quarter under review continue to resonate well with Nestlé’s consumers

By SULHI KHALID / Pic By MUHD AMIN NAHARUL

NESTLÉ (M) Bhd’s net profit rose 8.2% to RM148.99 million in the third quarter ended Sept 30, 2019 (3Q19), from RM137.69 million registered last year, underpinned by robust domestic sales and sustainable efficiencies and savings.

However, the group’s revenue declined 2.2% to RM1.4 billion in 3Q19 from RM1.43 billion recorded the year prior, as exports were still hit by unfavourable trading conditions in certain major markets, it said in an exchange filing yesterday.

The food and beverage (F&B) giant proposed an interim dividend of 70 sen for the quarter, to be paid on Dec 19.

It said sales growth was subdued during the quarter in focus compared to “exceptionally strong sales in 3Q18 (0% Goods and Services Tax period)”, and in spite of solid domestic sales expansion of 1.7% when adjusted for the divestment of the group’s chilled dairy business.

Growth in domestic sales was driven by strong sales execution, continuing success of product innovations and strong marketing support, Nestlé Malaysia CEO Juan Aranols said.

“New innovations launched during the quarter under review continue to resonate well with our consumers,” he said in a statement.

According to the group’s exchange filing, new product launches in 3Q19 included — the Starbucks At Home range, the relaunch of Nescafé Gold Mixes, Milo Protein Up, new Nescafe Ready-To-Drink variants, Nestlé Crunch Wafer Nuts and Drumstick Pika Pika ice cream.

For the nine months ended Sept 30, 2019, the F&B firm’s net profit climbed 1.1% to RM541.095 million from RM535.06 million the year before.

Turnover increased 0.4% to RM4.19 billion from RM4.17 billion previously, driven by domestic sales, which expanded 2.6% during the period.

“The improved performance in the first nine months of 2019 was driven by sustained consumer demand and positive offtake for our brands.

“This was achieved on the back of robust demand and effective marketing support over the Chinese New Year and Hari Raya festive seasons, and successful pro- duct innovations and portfolio renovation,” Aranols added.

Moving forward, the group will enhance efficiencies and generate savings to invest in its brands and protect its margins.

“In the current context, this remains the most effective strategy to counter rising commodity costs and protect the accessibility to our brands by consumers,” it said.

The group also expects to “land another quarter of solid results” in 4Q19 and for the full year, despite a challenging backdrop of global and local uncertainties (both consumer and commodities).

Shares of Nestlé closed 0.28% higher at RM145.30 yesterday, valuing the group at RM34.07 billion.