KUALA LUMPUR (Feb 25): Nestlé (Malaysia) Bhd (KL:NESTLE) reported a significant 72.2% year-on-year (y-o-y) drop in its fourth-quarter net profit, primarily due to increased input costs and lower sales.

The company's net profit for the three months ended Dec 31, 2024 (4QFY2024) fell to RM41.10 million — lowest in 11 years since 4QFY2013 — from RM148.10 million in 4QFY2023.

Earnings per share declined to 17.53 sen from 63.16 sen, a bourse filing on Tuesday showed. 

The group declared an interim dividend of 74 sen per share, payable on May 15. This brings its year-to-date dividend payout to RM1.79, the lowest annual dividend paid in 15 years since FY2009, when it distributed RM1.50. The company paid dividends per share totalling RM2.68 for FY2023.

Nestlé Malaysia, known for producing popular food and beverage products such as Milo, Maggi and Nescafé, saw its revenue drop 12.6% to RM1.47 billion in 4QFY2024, from RM1.69 billion in 4QFY2023. “This reduction was primarily attributed to a contraction in domestic sales, which was impacted by consumer hesitancy and consumer confidence,” Nestlé Malaysia said.

Despite the challenging domestic business, Nestlé Malaysia reported a 6.9% y-o-y growth in its export business, benefiting as the largest halal manufacturing and export hub for the Nestlé group globally, the company said.

For the full FY2024, the group’s net profit fell 37% to RM415.62 million — the lowest in 14 years since FY2010 — compared with RM659.87 million in FY2023. Revenue contracted 11.7% to RM6.22 billion from RM7.05 billion.

Quarter-on-quarter, its latest quarterly net profit was down by 51.9% from RM85.41 million in 3QFY2024, while revenue was up 1.83% from RM1.45 billion in the immediate preceding quarter.

Notwithstanding the lower earnings, Nestlé Malaysia expects a return to “healthy growth levels” in 2025, driven by a broad product portfolio, strong brand equities, and an extensive sales and distribution network.

“The group will continue to strengthen its manufacturing infrastructure, reinforcing Nestlé Malaysia's role as the largest halal manufacturing and export hub for the Nestlé group worldwide, while contributing to the nation's food security and the well-being of the rakyat,” it said.

Nestlé Malaysia's shares settled down RM1.50 or 1.64% at RM90 on Tuesday, valuing the group at RM21.1 billion.