KUALA LUMPUR (July 25): Nestlé (Malaysia) Bhd (KL:NESTLE) saw its net profit decline 48.27% to RM93.60 million in the second quarter ended June 30, 2024 (2QFY2024), down from RM180.92 million a year ago. 

The decline was driven by a drop in domestic sales, reflecting subdued consumer sentiment and constrained purchasing power, Nestlé (Malaysia) said in its bourse filing.

Revenue for the quarter stood at RM1.52 billion, down 13% as compared to RM1.75 billion a year earlier. 

The group declared an interim dividend of 70 sen per share, which will be paid on Oct 3.

Moving ahead, Nestlé (Malaysia) expects the challenging conditions to remain throughout the third quarter and moderate progressively towards the end of the year, with a return to growth latest by 1H2025.

"In the meantime, we will continue providing Malaysians with the best range of great tasting halal products that meet their health, nutrition and lifestyle expectations, and always anchored on our foundation of quality and safety," Nestlé (Malaysia) said.

For the first half of 2024 (1HFY2024), its earnings fell 23.53% to RM289.11 million, down from RM378.06 million from a year earlier, attributed to the subdued consumer sentiment and cautious spending observed during the Chinese New Year and Hari Raya festive seasons. 

Revenue for 1HFY2024 reached RM3.31 billion, an 8% decline from the historically high record sales achieved for 1HFY2023 of RM3.59 billion. 

Commenting on the latest results, Nestlé (Malaysia) chief executive officer Juan Aranols said the group recognised the significant challenges that high food costs — driven by the global situation of commodity prices — create for Malaysian families.

“That is why we continue to make every possible effort to moderate the translation to our final prices of these external cost increases, absorbing them to the best of our ability and mitigating cost pressure through all possible actions, including the constant search for internal process efficiencies and the adoption of digital-enabled technologies across our entire value chain.” he noted.

Nestlé (Malaysia) shares ended 20 sen or 0.16% higher at RM122 on Thursday, valuing the company at RM28.61 billion.