Nestle's net profit surges on lower effective tax rate

The Nestle logo is pictured on the company headquarters entrance building in Vevey, Switzerland February 18, 2016. REUTERS/Pierre Albouy/File Photo

KUALA LUMPUR: Nestle (M) Bhd saw its earnings grow 52.4% year-on-year (y-o-y) in its second quarter ended June 30, thanks to a lower effective tax rate, as well as a combination of higher turnover, favourable price trends in key raw materials and improved efficiency in the factories as well as the whole supply chain.

During the quarter under review, the nutrition, health and wellness company posted a net profit of RM188.8mil, compared with RM123.9mil in the previous year’s corresponding period.

In its filing with Bursa Malaysia, Nestle said the stronger performance of its domestic business and export business contributed to the 8.2% y-o-y increase in turnover to RM1.24bil in the quarter.

“The growth in the domestic business was driven by the successful marketing and trade promotions, which also led to a further increase of our market shares,” Nestle said.

Its earnings per share (EPS) rose to 80.51 sen in the second quarter from 52.84 sen in the corresponding period of last year.

The group has declared a first interim dividend of 70 sen per share.

For the first six months of the year, Nestle made a net profit at RM409.5mil representing a growth of 31.3% over RM311.8mil achieved in the first half of 2015, with its EPS rising to RM1.75 from RM1.33 previously.