This article first appeared in The Edge Financial Daily on October 31, 2018

KUALA LUMPUR: Nestle (Malaysia) Bhd’s net profit rose 15.7% to RM137.69 million in the third quarter (3Q) ended Sept 30, 2018 (3QFY18) from RM119.01 million a year ago, on higher turnover coupled with an improved margin.

The group said the favourable price trend in major raw materials and continuous drive for efficiency increases along the supply chain led to the margin improvement.

Earnings per share was also up at 58.72 sen for 3QFY18 compared with 50.75 sen for 3QFY17.

Quarterly revenue increased 8.3% to RM1.43 billion from RM1.32 billion in 3QFY17, driven by strong domestic and export sales.

“The zero-rated goods and services tax implementation from June to August this year further boosted consumer spending, leading to higher demand and increased sales,” said Nestle Malaysia in a filing with Bursa Malaysia yesterday.

“With the move and transition to the new national distribution centre (NDC) fully completed in July, the group [also] benefitted from the encouraging market situation,” it added.

The group also declared a second interim dividend of 70 sen per share, amounting to RM164.15 million, for FY18, payable on Dec 13.

For the cumulative nine months of FY18 (9MFY18), the group’s net profit grew 4.7% to RM535.06 million from RM511.14 million a year ago, while revenue advanced 4.8% to RM4.17 billion from RM3.98 billion in 9MFY17.

In a separate statement, Nestle Malaysia’s outgoing chief executive officer Alois Hofbauer said a range of successful product innovations have contributed to the group’s overall turnover in 9MFY18.

On prospects, Nestle Malaysia said it is confident that its investments, including the new NDC, will enable it to maintain its solid growth momentum.