This article first appeared in The Edge Financial Daily on February 21, 2018

KUALA LUMPUR: Nestle (M) Bhd posted a record high fourth-quarter net profit of RM133.54 million, double the RM66.94 million reported last year, thanks to continued sustainable cost management.

Nestle said the different phasing of marketing investments in 2017 also drove the quarterly net profit as investments were well spread over four quarters compared with the exceptionally high spending in the fourth quarter of 2016 (4Q16).

Earnings per share for the fourth quarter ended Dec 31, 2017 (4QFY17) stood at 56.95 sen compared with 28.55 sen in 4QFY16, the group said in a filing with Bursa Malaysia.

Quarterly revenue inched up 2.54% to RM1.28 billion from RM1.25 billion previously. The group said the rise should be interpreted in light of the Chinese New Year which began later in 2018 compared with that in 2017, resulting in less sales taking place in 4Q17 versus that in 4Q16.

Nestle said the increase in revenue was supported by domestic sales that grew 4.5% due to continuous innovation and renovation initiatives, and successful marketing and trade promotions.

The steady domestic sales compensated for the moderate slowdown in export sales because of the later phasing of Chinese New Year in 2018, it added.

Nestle also registered its highest full-year net profit for FY17 at RM645.80 million, up 1.36% from RM637.13 million in FY16. Revenue climbed 3.89% to RM5.26 billion from RM5.06 billion in FY16.

The group proposed a final dividend of RM1.35, bringing total payout for FY17 to RM2.75.

“The group’s solid performance has been achieved due to strategic investments in campaigns, including the Kuala Lumpur SEA Games 2017 and Milo Breakfast Day which inculcates good breakfast habits and active lifestyles, as well as Nestle Omega Plus’ ‘Stop The Count’ campaigns promoting healthier hearts,” said Nestle chief executive officer Alois Hofbauer in a media release.

“Nestle’s continuous focus on innovation and renovation has also been key in contributing to these positive results, with new and exciting products contributing to our turnover growth. In the year under review, we successfully launched new products including Milo Nutri-up, high in calcium and a good source of protein, as well as Nestum Cereal with Milk in a bottle filled with multigrains,” he added.

Nestle’s share price closed up RM1.10 or 0.91% at RM121.50 yesterday, with a market capitalisation of RM28.5 billion.