KUALA LUMPUR (Feb 23): Nestlé (Malaysia) Bhd (fundamental:1.15 ; valuation:0.9) recorded a net profit of RM98.3 million, down 2.14% year-on-year (y-o-y) for the fourth quarter of financial year ended Dec 31, 2014 (4QFY14), which translated to an earnings per share of 41.92 sen compared to 42.84 sen previously.

Its revenue for the quarter under review was RM1.11 billion, down 2.6% from 4QFY13's RM1.13 billion, which it attributed to declining consumer sentiment, which impacted domestic sales.

It also declared a final dividend of RM1.75 per share, which amounted to RM410.375 million for the period, payable on May 27, 2015. This brings its full FY14 dividends to RM2.35 per share, its filing on Bursa Malaysia today showed.

"Although commodity prices with the exception of palm oil were on a favourable trend in the quarter, this was offset by the depreciation of the ringgit against the US dollar," it noted in the filing.

Meanwhile, for the full FY14, the group recorded a net profit RM550.38 million, down 2.01% from RM561.70 million a year ago, while revenue was RM4.81 billion, up 0.44% from RM4.79 billion, which it attributed mainly to lower exports to affiliated companies as a result of the challenging global economy and reduced demand in some export categories. 

This was further compounded by the fact that its Philippine and Indonesian affiliates have invested in their local manufacturing capabilities.

"The year ahead will be challenging, particularly in light of weakening global oil prices and the volatile economic climate. Moreover, the implementation of the Goods and Services Tax (GST) in April 2015 will certainly impact consumer buying behaviour and a period of adjustment is expected before consumer demand is able to normalise," said Nestlé managing director Alois Hofbauer in a press statement.

Nevertheless, he said Nestlé remains focused on achieving organic growth and that in line with the group's strategy of expanding manufacturing capacity, its new Sri Muda Factory in Shah Alam is slated to commence operations in 1QFY15.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)