Nestlé Malaysia’s new plant to drive growth

The easing of movement restrictions in 2H20 helped the FMCG company record a profit of RM133m

By LYDIA NATHAN / Pic By MUHD AMIN NAHARUL

NESTLÉ (M) Bhd noted higher sales on the easing of movement control in the second half of last year (2H20) helped it post a net profit of RM132.5 million for the fourth quarter ended Dec 31, 2020 (4Q20), a marginal increase from the RM131.9 million net profit it made in the same quarter last year.

In a filing to Bursa Malaysia yesterday, the fast-moving consumer goods (FMCG) maker and trader stated its revenue increased from RM1.33 billion in 4Q19 to RM1.37 billion in 4Q20 due to sales in Out-of-Home (OOH) channels as restrictions eased in the 2H20, under the Recovery Movement Control Order (RMCO).

Nestlé said its core food and beverage business has continued to be the key contributor, recording a 6% growth, while its export business also recorded good growth.

“The better quarterly results are a credit to our teams’ tireless efforts in driving growth opportunities across all brands and channels in a challenging context (specially in OOH channels) and an extremely competitive environment.

“Our brands have continued to gain consumers’ endorsement thanks to solid brand plans, exciting innovations and strong sales execution,” Nestlé noted in the filing.

The group added that the accelerated roll-out of product innovations was also a key growth driver during the quarter.

In addition to the innovations introduced in prior quarters, new products further reinforced the portfolio, including MILO Nutri

Breakfast, new formats of MAGGI Chilli Sauce, and the introduction of KITKAT GOLD, in both ice cream and confectionery versions.

“A highlight of the quarter was the launch of NESCAFÉ Classic Kopi Kedah, our first-ever NESCAFÉ made with 100% Malaysian grown coffee beans,” Nestlé said.

For the full year, Nestlé posted a net profit of RM552.71 million versus RM672.91 million in financial year 2019 (FY19) due to the impact of Covid-19 on OOH channels, Covid-19-related expenses and a one-off gain from the divestment of the Petaling Jaya factory in the comparative year.

Total group revenue stood at RM5.41 billion for FY20. Nestlé declared a third interim dividend of 92 sen per share for the quarter payable on May 20, 2021, which took the total dividend payout to RM2.32 per share.

Nestlé noted that the Covid-19 pandemic will continue to have an impact this year, but the company will continue to ensure the supply of its products and support vulnerable communities through different programmes.

“There will be exciting developments in 2021 such as our entrance in the emerging plant-based category. Our plant-based meal solutions manufacturing facility, one of only two across all of Asia, is now complete and operational, and will be officially launched in April 2021,” it said.

It also expects to expand and upgrade its manufacturing facilities and accelerate efforts in shaping a greener, more sustainable future with its Project RELeaf.

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