Nestle posts net profit of RM128.39mil, declares 70 sen/share dividend

KUALA LUMPUR: Nestle (Malaysia) Bhd recorded a net profit of RM128.39mil in the third quarter ended Sept 30, 2020, which was 13.8% lower than RM148.99mil in the previous corresponding quarter due to the impact of the pandemic on hotels and restaurants and higher operational expenses.

For the quarter under review, revenue was RM1.39bil, slightly lower than RM1.4bil in the comparative quarter.

The group declared an interim dividend of 70 sen per share payable on Dec 16, 2020.

In a statement to Bursa Malaysia, Nestle said its core food and beverage business recorded 2.2% growth due to strong in-home consumption and a positive recovery in exports.

"We have kept very close to Malaysians with strong communication campaigns, effective digital engagement and continued strong in-store execution," it said.

"One of the highlights of this strong engagement was represented by the ‘Peraduan Nestlé Gaji Seumur Hidup ’ (Nestlé Salary for Life contest) TV grand finale in August, which became one of the most watched gameshows of the year and allowed us to bring joy to all the winners as well as the 17 charities endorsed by each one of them.

"The 70th MILO anniversary celebrations and our MAGGI Sah Malaysia (MAGGI Confirm Malaysia) campaign were also great examples of how we keep our brands relevant and close to all Malaysians.

"We also embarked on a Bangkit Bersama Nestlé (Rise with Nestlé) program, aimed at supporting local coffee shops and small restaurants impacted by COVID-19," it added.

However, the performance of hotel, restaurant and cafe (Horeca) channels were weaker compared to the previous year although there was improvement following the easing of operational constraints during the start of the recovery movement control order in mid-June.

The profit contraction in 3Q was also owing to expenses of RM50mil to preserve work safety and operational continuity amid the pandemic as well as the one-off gain on disposal of RM19.8mil that was recorded in 2019.

Moving forward, Nestle will proceed with its investment plans as announced, and remains confident over its longer-term prospects.

"With the recent rise in COVID-19 cases and the re-enforcement of the Conditional MCO (CMCO), we will continue to ensure the safety of our people and business partners and play our part to support communities.

"Our strong innovation pipeline across categories will further support our performance in the fourth quarter, and we remain focused on driving excellence in operations and commercial execution to accelerate growth," it said.
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