Nestle allocates highest capex in seven years

KUALA LUMPUR: Nestle (Malaysia) Bhd is allocating a capex of RM300mil in 2021, its highest in seven years, to ramp up production capacity and upgrade technology as well as adopt state-of-the-art automation and digitalisation.

"We will also continue to drive our sustainability efforts across multiple fronts, with focus on Reforestation, Plastic Reduction/Collection and Recycling and constant effort to reduce the CO2 footprint of our operation," it said on the back of its first-quarter earnings result.

Nestle posted a lower net profit of RM175.16mil in the first quarter ended March 31, 2021, 5.9% lower than RM186.31mil in the previous corresponding quarter due to additional expenses incurred from Covid-19.

Earning per share was 74.7 sen, down from 79.45 sen in 1Q2020.

Revenue for the quarter was RM1.45bil, 1% higher than RM1.43bil in the year-ago quarter on improved contribution from the food and beverage business.

According to Nestle, there was robust in-home consumption with good momentum across most brands although Out-of-Home activities were impacted by the MCO's impact on the hospitality and restaurant sectors.

"The first quarter of 2021 reflected the ability of our teams to continue to drive growth and protect both people and performance amidst very challenging pandemic conditions.

"Across brands, we have seen very strong activities that have resonated well with Malaysians," said Nestle in its filing with Bursa Malaysia.

Over the quarter, the main contributor to Covid-19-related expenses wass the ongoing Covid-19 antigen screen programme for workplace safety.

However, these expenses were cushioned by the Reinvestment Allowance tax incentive for the group's new PBMS manufacturing facility, said Nestle.

"We are confident to maintain solid growth momentum for the balance of the year and across businesses.

"We are encouraged by the signs of slow but firm recovery of OOH channels in the months ahead, while we have high confidence in the sustained momentum of our brands as preferred choices by Malaysian families," it added.
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nestle , F&B , consumer , capex


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