Thursday 28 Mar 2024
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KUALA LUMPUR (Oct 25): Nestle (M) Bhd reported a 10% drop in third quarter net profit from a year earlier on the food and beverage company's higher operating expenses. Operating expenses rose on higher promotional cost.

In a statement to Bursa Malaysia today, Nestle said net profit fell to RM160.71 million in the third quarter ended Sept 30, 2016 (3QFY16) from RM179.16 million. Revenue rose to RM1.26 billion from RM1.22 billion.

"From profit perspective, gross profit increased from RM461 million to RM491 million, a growth of 6.5%. Main drivers for the improved gross profit were the higher turnover as well as efficiency increases in the factories and the supply chain.

"These savings were reinvested into the business by supporting the new products as well as by intensifying our trade and consumer promotions in order to continue to strengthen our market share position as the base for a sustainable growth. As a result, the operating profit and the net profit reduced compared to the corresponding period in 2015," Nestle said.

For 3QFY16, the company declared a dividend of 70 sen a share.

The ex- and payment dates fall on Nov 11 and Dec 2 this year respectively.

Nestle said 9MFY16 net profit climbed to RM570.19 million from RM490.94 million a year earlier while revenue was higher at RM3.81 billion versus RM3.64 billion.

Looking ahead, Nestle said its business strategy was based on its "cautiously optimistic outlook" on the Malaysian economy.

"Based on our cautiously optimistic outlook for the Malaysian economy, we will continue with our "Fuel the Growth" strategy: Striving for efficiency increases all over the supply chain and reinvesting the realised improvements into the sustainable growth of the company by innovating/renovating our portfolio and intensifying our trade and consumer promotions," the company said.

At Bursa Malaysia today, Nestle shares rose 30 sen or 0.4% at 12:30pm to settle at RM78.50 for a market value of RM18.41 billion. Nestle was the second-largest gainer across the bourse.

 

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