Nestle’s 1Q net profit rises 17% to RM205.18mil

KUALA LUMPUR: Nestle (M) Bhd’s net profit rose 17.14% to RM205.18mil in the first quarter ended March 31, compared with RM175.16mil in the same period a year ago.

The multinational food and drink group noted that it recorded higher earnings despite the impact of increased commodity prices, as well as the impact of the Cukai Makmur (Prosperity Tax) on net profit.

Its revenue for the quarter rose 16.9% from RM1.45bil to RM1.69bil, driven by both higher domestic and export sales, which grew 14.9% and 25.3% respectively.

Nestle said it recorded strong performance in both the core food and beverage (F&B) business and the out-of-home (OOH) business under Nestlé Professional has benefitted from the increased mobility and re-opening of hotel, restaurant & café (HORECA) channels post lockdown.

“As we mark Nestlé’s 110th year in Malaysia, we see solid consumption momentum, supported by our demand generation efforts as well as the solid operational execution by our factories, logistics and sales teams.

“We remain focused in delivering high-quality, great-tasting and nutritious products that meet the diverse needs of Malaysians, alongside ensuring excellence execution in consumer communications, digital engagement and in-store activities,” Nestle said.

Commenting on its prospects, Nestle is confident in sustaining growth momentum across the year, even if it sees growth levelling down from current high levels in the coming quarters.

“The global environment remains very challenging, with widespread inflation gaining traction across the world and also in Asia, aggravated by the war in Ukraine impacting further prices and availability of key food commodities such as wheat, barley and sunflower oils.

“Overall, 2022 is shaping as a year of solid growth in the top line and some pressure on the bottom line as we do our best to balance the tensions on our cost value chain with internal efficiencies and moderate price increases.

“Despite the foreseeable hurdles, we aim to continue leveraging on all possible opportunities to drive another year of solid and resilient results, whilst making meaningful progress in our ESG agenda to contribute to Malaysia’s sustainable progress,” it said.