KUALA LUMPUR: Nestle (Malaysia) Bhd shares soared in the morning trading session amid posting lower net profit for the first quarter (1Q) of 2025.
At 10.16 am, Nestle's share price strengthened by 50 sen to RM80.88, with 52,800 shares changing hands.
In a filing with Bursa Malaysia, Nestle reported a lower net profit of RM161.34 million in the 1Q ended March 31, 2025, from RM195.51 million a year earlier, while revenue also declined to RM1.77 billion from RM1.78 billion previously.
In a note, MIDF Amanah Investment Bank Bhd said Nestle’s 1Q 2025 performance was in line with expectations, supported by festive-driven domestic sales recovery.
"However, margin pressure from elevated input costs and higher marketing expenses continued to weigh on earnings,” it said.
Besides, Hong Leong Investment Bank Bhd (HLIB) also opined that Nestle’s 1Q 2025 results were broadly within expectations, with a strong seasonal showing despite headwinds from weaker domestic sales and elevated commodity prices.
"While top-line growth was supported by festive demand and export gains, margin pressure persisted year-on-year,” it said in a separate note.
Looking ahead, HLIB said Nestle remains challenged by geopolitical tensions, commodity volatility, and softer consumer sentiment, but continues to strengthen its environmental, social and governance initiatives.
In addition, MIDF remained cautious on Nestle’s outlook, given the prolonged impact of weak consumer sentiment and ongoing geopolitical uncertainties, which could continue to weigh on domestic sales.
"A full cost pass-through remains challenging in the near term, considering Nestle’s strategic focus on offering better value to consumers to defend market share.
"While management expects sequential improvement from 2Q 2025 onwards, we believe that profit margins will likely remain under pressure as raw material prices remain elevated,” it added. - Bernama
