KUALA LUMPUR (April 27): Nestle (Malaysia) Bhd's net profit for the first quarter ended March 31, 2021 (1QFY21) fell 6% year-on-year to RM175.16 million from RM186.31 million, underpinned by lower out-of-home sales activities due to the Covid-19 pandemic.
Consequently, the group’s earnings per share declined to 74.7 sen from 79.45 sen previously.
In a Bursa Malaysia filing today, the group highlighted its quarterly revenue, however, rose marginally by 1% to RM1.45 billion against RM1.43 billion a year ago, fuelled by robust in-home consumption, with good momentum across most brands.
However, the group did not declare any dividend for the quarter.
On a quarter-on-quarter basis, Nestle registered a higher turnover of 5.8% compared to the preceding quarter, mainly due to higher sales during the Chinese New Year period.
Moving forward, the group said it will further renew its commitment to Malaysia by allocating RM300 million of capital expenditure to ramp up production capacity in several factories and upgrade technology for increased productivity and efficiency, as well as adoption of state-of-the-art automation and digitalisation.
“We will also continue to drive our sustainability efforts across multiple fronts, with focus on reforestation, plastic reduction/collection and recycling and constant effort to reduce the CO2 footprint of our operations.
“With all the above in place, we think 2021 can shape up to be another solid year, with top line growth and resilient margins, even though a note of caution is needed, given the volatility in many commodity markets and the ongoing challenges to global supply chains derived from the global crisis in ocean freight transportation,” it said.
In a separate statement, Nestle Malaysia CEO Juan Aranols said all things considered, 1QFY21 reflects the group's ability to continue to drive growth and sustain performance amidst the very challenging pandemic conditions.
"Across brands, we have seen very strong activities that have resonated well with Malaysians," he said.
On the outlook for 2021, Aranols said Nestle Malaysia is confident of maintaining growth momentum for the balance of the year and across businesses.
"We are encouraged by the recovery signs in out-of-home channels, while we have high confidence in the sustained momentum of our brands as preferred choices by Malaysian families.
"We will continue to work hard to meet consumer expectations and keep our brands close to their hearts as part of their daily lives," he said.
At midday break today, Nestle shares dipped 0.07% or 10 sen to RM136.40, valuing it at RM31.99 billion.