Nestle (Malaysia) Bhd sees strong demand for its brands in Malaysia and it has strong plans in place to continue generating sustainable and profitable growth.
KUALA LUMPUR: Nestle (Malaysia) Bhd recorded a set of firmer earnings in the first quarter ended March 31, 2019 with net profit of RM235.21mil and remained confident in its ability to deliver another solid year of results for FY19.
The company announced to Bursa Malaysia on Tuesday, the net profit was up 1.7% from RM231.21mil a year ago.
Its revenue increased by 1.6% to RM1.45bil from RM1.43bil a year ago. Earnings per share were 100.31 sen compared with 98.60 sen.
Nestle said factoring in the divestment of the chilled dairy business on Jan 1, 2019, this represents a solid 3.2% increase in growth year-on-year.
Turnover was driven by robust domestic sales of 4.9% for the quarter, which was fuelled by strong sales momentum during the Chinese New Year.
“Operating profit increased by 6% from RM303mil to RM322mil. The group recorded lower operating expenses due to phasing of marketing and promotional spends, as well as efficiency increases across the supply chain.
“As a result, profit before tax grew by 6.1% from RM295mil to RM313mil, reflecting a strong bottom line performance even in comparison to a solid first quarter for 2018,” it said.
When compared with the fourth quarter, Nestle's revenue of RM1.45bil was 7.8% higher than the fourth quarter of 2018.
“This strong growth is driven by our impactful marketing and promotional activities during the festive period. This is also partially explained by the seasonality of our business as the strong sales during the Chinese New Year period contribute to a high Q1 turnover,” it said.
Operating profit jumped by 69.4% or RM132 million to RM322mil and profit before tax by RM133 mil (+73.8%) to RM313mil.
Nestle said the main reasons for this were the normal phasing of the marketing investments and promotional spends (higher in Q4).
“We see strong demand for our brands in Malaysia and we have strong plans in place to continue generating sustainable and profitable growth.
“We acknowledge that there will be some pressures from higher commodity prices and more volatile demand in our main export markets but we remain confident in our ability to deliver another solid year of results in 2019,” it said.
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