Nes­tle posts lower net profit on rein­vest­ment ac­tiv­ity

The Sun (Malaysia) - - SUNBIZ -

PETAL­ING JAYA: Nes­tle (Malaysia) Bhd’s net profit for the third quar­ter ended Sept 30, 2016 fell 10.3% to RM160.71 mil­lion from RM179.16 mil­lion a year ago de­spite achiev­ing higher gross profit.

In a fil­ing with Bursa Malaysia yes­ter­day, the com­pany said its gross profit grew 6.5% to RM491 mil­lion dur­ing the quar­ter from RM461 mil­lion a year ago due to higher rev­enue as well as bet­ter ef­fi­ciency in the fac­to­ries and sup­ply chain.

“These sav­ings were rein­vested into the busi­ness by sup­port­ing the new prod­ucts as well as by in­ten­si­fy­ing our trade and con­sumer pro­mo­tions in or­der to con­tinue to strengthen our mar­ket share po­si­tion as the base for a sus­tain­able growth. As a re­sult, op­er­at­ing profit and net profit re­duced com­pared with the cor­re­spond­ing pe­riod in 2015,” it said.

Rev­enue for the quar­ter rose 3.66% to RM1.26 bil­lion from RM1.22 bil­lion a year ago, driven by do­mes­tic and ex­port busi­nesses, which grew 3.5% and 4.5% re­spec­tively, as well as new prod­uct launches.

For the nine months ended Sept 30, 2016, net profit rose 16.14% to RM570.19 mil­lion from RM490.94 mil­lion a year ago, driven by higher rev­enue, favourable com­mod­ity prices and im­proved ef­fi­ciency in the fac­to­ries and over­all sup­ply chain.

Rev­enue for the pe­riod rose 4.8% to RM3.81 bil­lion from RM3.64 bil­lion a year ago due to higher do­mes­tic sales and growth in its ex­port busi­ness.

The com­pany de­clared a sec­ond in­terim div­i­dend of 70 sen per share amount­ing to RM164.15 mil­lion in re­spect of fi­nan­cial year end­ing Dec 31, 2016, payable on Dec 2, 2016.

Based on a “cau­tiously op­ti­mistic” out­look on the Malaysian econ­omy, the com­pany said it will con­tinue with its “Fuel the Growth” strat­egy, which is to strive for ef­fi­ciency in­creases in its sup­ply chain while rein­vest­ing re­alised im­prove­ments into sus­tain­able growth of the com­pany by in­no­vat­ing/ren­o­vat­ing its port­fo­lio and in­ten­si­fy­ing trade and con­sumer pro­mo­tions.

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