9M profit remains strong amidst increased pressure from commodity costs
- Turnover increased by 17.5% to RM5.02 billion for the first nine months of the financial year, driven by strong domestic and export sales
- Profit After Tax (PAT) for the first nine months grew by 6.5% on the back of higher sales and reduced COVID-19 related expenses, with some margin erosion in the latest quarter derived from commodities headwinds
- Second interim dividend of RM0.70 per share declared
PETALING JAYA, October 26, 2022 – Nestlé (Malaysia) Berhad maintained its accelerated growth momentum, recording an improved top and bottom-line performance for the first nine months ended 30 September 2022, versus the first nine months of 2021. These results were driven by stronger domestic and export sales alongside continued recovery of out-of-home (OOH) channels and resilient in-home consumption. The Group saw some erosion of margins in the third quarter impacted by commodities headwinds and foreign exchange volatility.
Solid growth performance across brands in both domestic and export markets
For the nine-month period under review, the Group’s sales reached RM5.02 billion, marking a 17.5% increase from RM4.27 billion in last year’s corresponding period. Domestic and export sales grew by 13.7% and 33.8% respectively on the back of solid growth in both the core Food and Beverage (F&B) and OOH segments, which continued to benefit from strong recovery following the full lifting of movement restrictions earlier in the year.
Mr. Juan Aranols, Chief Executive Officer of Nestlé (Malaysia) Berhad, said, “We have seen another quarter with robust demand for our portfolio of products and brands, confirming that we are well tuned with the expectations and demands of Malaysian consumers. We remain committed to bring our “Good Food, Good Life” promise to Malaysians of all walks of life, wherever they are and in whichever format they like our products. I want to thank all the Nestlé teams for their commitment and efforts to preserve Nestlé Malaysia’s leading position amongst the FMCG industry. Nestlé continues to stand strong as we celebrate our 110th year in Malaysia.”
For its third quarter under review, the Group delivered a turnover of RM1.68 billion, reflecting a 17.0% increase compared with the same quarter last year. Domestic and export sales increased by 13.5% and 30.2% respectively as economic activities continued to stabilise both locally and globally. OOH channels continued to recover compared to the same period last year, which saw OOH businesses impacted by movement restrictions in certain areas of Malaysia.
“With the progressive return to pre-pandemic normalcy, we have been leveraging all opportunities to increase the reach of our core products, while continuing to lead in product innovation. This included further expansion of our plant-based meal solutions with the launch of the HARVEST GOURMET Plant-Based Nuggets and other innovations such as NESTLÉ OMEGA PLUS Dark Chocolate Milk Powder; our healthier choice MAGGI Nutri-licious Noodles range; the introduction of our premium chocolate block range under NESTLÉ LES RECETTES DE L'ATELIER Chocolate and KITKAT Bar Dark with Southern Australian Oranges, to name a few. We continue to support all these initiatives with effective marketing support with increased focus on digital. We have also seen strong demand across key export categories including Ready-to-Drink formats, Foods and Confectionery.”
Profitability remains solid amidst growing commodity headwinds
For the nine-month period under review, higher sales and lower COVID-19 expenses helped to partially mitigate the impact of higher commodity prices, unfavourable exchange rates and the impact of Cukai Makmur (Prosperity Tax) on PAT. The Group’s Profit Before Tax (PBT) and Profit After TAX (PAT) increased by 11.8% and 6.5% to RM676.1 million and RM487.5 million respectively for this period.
For the third quarter of 2022, the Group recorded PBT and PAT of RM149.6 million and RM112.6 million respectively. This was lower compared with the same period in 2021 primarily due to the impact of higher commodity prices and unfavourable exchange rates, as well as the quarterly impact of Cukai Makmur on PAT.
In line with the Group’s commitment to deliver value to shareholders, the Board declared a second interim dividend of RM0.70 per share for the financial year ending 31 December 2022, same as the second interim dividend of 2021.
Mr. Aranols said, “As we move ahead into the final quarter of the year, the Group remains in a resilient position to deliver a year of solid growth. Nevertheless, we continue to contend with tough market conditions defined by high commodity prices and energy costs, in a challenging and volatile global environment. Adding to this, the Malaysian Ringgit has depreciated to its weakest point against the USD in many years, further compounding the impact from imported commodities, even if this has been partially softened by our hedging policy.”
“In this context, we will remain focused on what matters: meeting the expectations of taste and quality of all Malaysians and nurturing the strong bonds of our brands with the Rakyat. We will continue to enhance operational efficiencies to moderate the impact of external cost headwinds. And last, but not least, we will continue driving our ESG agenda with our comprehensive set of green initiatives making good progress”, he added.
About Nestlé Malaysia
Nestlé is the world’s largest food and beverage manufacturer. Headquartered in Switzerland, Nestlé is present in more than 180 countries around the world, and our 270,000 employees are committed to Nestlé’s purpose of unlocking the power of food to enhance quality of life for everyone, today and for generations to come. Our performance is driven by our Nutrition, Health and Wellness strategy. Nourishing Malaysians since 1912, Nestlé has earned the trust of our consumers through our quality brands and products. We are committed to improving the lives of the communities in which we operate, whilst maintaining our Halal excellence and integrity.
This is in line with our promise of delivering GOOD FOOD, GOOD LIFE to all. To learn more about how we have been nourishing Malaysians for over a century, do visit www.nestle.com.my or our Facebook page at http://www.facebook.com/Nestle.Malaysia.
For more information, please contact:
Nestlé (Malaysia) Berhad
Tel: +603 7965 6650
E-mail: [email protected]
Farah Iman or Yasmin Kadir
Tel: +603 7958 8348
E-mail: [email protected]