Nestle Malaysia Q3 profit at RM161mil
Company posts higher revenue of RM1.3bil
KUALA LUMPUR: Nestle (M) Bhd registered a higher revenue but lower profit in the third quarter as the company channelled more resources into promotional and marketing activities to increase its reach.
It posted a net profit of RM160.71mil or 68.53 sen per share in the third quarter ended Sept 30, 2016 compared with RM179.16mil or 76.40 sen per share for the same period a year earlier.
The nutrition, health and wellness company attributed this to higher input costs and intense marketing as well as promotional activities.
Revenue increased 4.5% to RM1.262bil from RM1.218bil during the same period. A second net interim dividend of 70 per share was also declared for the financial year ending Dec 31, 2016 (FY16).
For its first nine months, the group recorded a turnover of RM3.8bil, 4.8% higher compared with the same period last year, driven by higher domestic sales and strong export growth.
Earnings rose by 16.1% to RM570.18mil from the RM490.94mil.
The group also saw a growth of 12.1% in operating profit to RM708mil over the nine month period, contributed by favourable commodity prices as well as efficiency increases in its factories and supply chain.
Managing director Alois Hofbauer said the group’s “Fuel the Growth” strategy will remain a core focus in the coming months, with continuous efforts to further increase end-to-end efficiency.
“We intend to maintain a good balance between enhancing cost efficiency and channelling these savings to fuel trade and marketing investments, in order to support sustainable growth for the future,” he said in a statement.
Hofbauer said innovation continued to be a key driver for growth, and was part of Nestlé’s DNA.
“We constantly look for new opportunities for growth as we adapt to our consumers’ evolving needs and expectations. This is why it is important for us to continue investing to grow the business sustainably.”
Hofbauer said the company’s drive to innovate had resulted in successful launches of multiple new products which have supported business growth, contributing strongly to domestic sales as well as exports. These include Nestlé Bliss Go, Nestum Banana Caramel, Nescafé Tarik, as well as Maggi OatMee.
In addition to new products, the company also wants to grow its e-commerce business, and has launched activities, such as the opening of the first Kit Kat concept store in South-East Asia - the Kit Kat Chocolatory, where consumers have the chance to customise their Kit Kat bars.
Hofbauer also said the group focused on internal improvements to achieve higher end-to-end efficiencies and productivity, and this has brought positive results.
“We take a balanced approach in channelling a part of the savings from these efficiencies into investments for marketing and trade promotions. This has enabled the group to maintain its growth trajectory,” he said.