Nestle posts strongest-ever revenue in FY23

PETALING JAYA: Boycott calls seem to have little impact on Nestle (M) Bhd as its annual revenue hit a record-high of RM7.05bil in the financial year of 2023 (FY23).

In fact, the food and beverage manufacturer reiterated its commitment to invest RM1bil in capital expenditure in Malaysia for the 2023 to 2025 period.

In a filing with Bursa Malaysia yesterday, Nestle said that domestic sales remained a key driver, raising its FY23 revenue by 5.8% year-on-year (y-o-y), even as export sales slowed.

Nestle’s net profit in FY23 rose higher by 6.4% y-o-y to RM659.87mil, also led by the group’s continuous focus on driving internal efficiencies and saving initiatives.

This helped to alleviate the impact of unfavourable commodity prices and exchange rates.

The stronger bottomline was also supported by lower taxes in the absence of Cukai Makmur or the prosperity tax imposed in 2022.

For the fourth-quarter period ended Dec 31, 2023 (4Q23), Nestle reported a 11.5% y-o-y increase in net profit to RM148.1mil, although revenue rose by just 2.3% y-o-y to RM1.69mil.

The group witnessed positive domestic growth in 4Q23, amid some correction in export sales against a high baseline last year.

While the fourth quarter was impacted by higher operating expenses, the absence of Cukai Makmur helped to lift the bottomline.

Earnings per share for the quarter under review were 63.16 sen.

The group declared a third interim dividend of RM1.28 per share in the quarter and the dividend will be paid on May 16.

Nestle chief executive officer Juan Aranols said in a statement that the group’s core brands continued to drive growth.

Meanwhile, its new innovative products are tapping on emerging growth trends to create growth platforms for the future.

These include the development of plant-based meals and drinks under the Harvest Gourmet and Goodnes brands as well as the development of new culinary solutions under Maggi.

In what seemed to be a response to boycott calls related to the Israel-Gaza conflict, Aranols highlighted that over 90% of the products Nestle sells are “Buatan Malaysia (Made in Malaysia) by Malaysians and for Malaysians”.

“Our products are also exported to many parts of the world, as we are the largest halal manufacturing hub in the Nestle world.”

Looking ahead, Aranols cautioned that challenges such as currency and commodity price fluctuations may persist, as well as the more subdued consumer sentiment and the impact on the purchasing power following the accumulated inflation of the last couple of years.

“Our investment plans, as planned earlier, are progressing and will set the foundation for further growth in the years to come.

“For the financial year of 2024, we are again confident in delivering resilient performance and meeting the expectations of our shareholders,” said Aranols.

In a separate filing with the stock exchange, Nestle announced that former CEO of Petroliam Nasional Bhd Tan Sri Wan Zulkiflee Wan Ariffin will take charge as its chairman effective May 1.

Wan Zulkiflee, who is currently a board member of Nestle, will replace Tan Sri Syed Anwar Jamalullail who will retire after helming the board of directors for 15 years.

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