Tuesday 30 May 2023
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KUALA LUMPUR (Oct 27): Nestle (M) Bhd's net profit for the third financial quarter ended Sept 30, 2014 (3QFY14) grew 9.87% to RM150.08 million from RM136.59 million a year ago, lifted by lower operating expenses.

Nestle also attributed the improved profit to a margin improvement of 170 basis points, it said in a filing with Bursa Malaysia today.

Earnings per share improved to 64 sen, from 58.35 sen a year earlier. However, its revenue for 3QFY14 dropped 4.2% to RM1.16 billion, from RM1.21 billion in 3QFY13.

The food and beverage conglomerate explained the lower revenue was mainly contributed by lower exports to the affiliated companies. “The increasingly challenging global economic environment, as well as a softening in demand for some export categories, have impacted the turnover.”

It noted the situation was further compounded by the fact that the Philippines and Indonesia have invested in their local manufacturing facilities for products previously imported from Malaysia.

For the nine months ended Sept 30, 2014 (9MFY14), the group’s net profit saw a marginal 2% drop to RM452.08 million, from RM461.25 million a year ago.

Its revenue for 9MFY14, however, rose 1.4% year-on-year to RM3.7 billion from RM3.65 billion.

Nestle said from an input cost perspective, the price of commodities has been on a mixed trend of which some of the raw materials prices started to ease in the third quarter.

It commented that the consumer sentiment was subdued, arising from increased cost of living and further rationalisation of subsidies. “To this effect, the group had to increase its investments in marketing and promotional activities, to drive higher domestic sales. Good results were seen, where solid business growth were registered in several categories such as confectionery, liquid drinks and ice cream.”

“We remain cautiously optimistic for the remaining of 2014, and expect the domestic demand to be moderate,” Nestle said.

Nestle’s share price was unchanged at RM68 today, giving it a market capitalisation of RM15.95 billion.

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