KUALA LUMPUR (Aug 27): Nestle (M) Bhd reported today a 6% drop in second quarter net profit to RM156.89 million from RM166.16 million a year earlier, as the food and beverage manufacturer registered higher operating expenses amid currency exchange rate volatility and higher commodity prices.

In a statement to Bursa Malaysia today, Nestle said revenue rose to RM1.34 billion in the second quarter ended June 30, 2019 (2QFY19) from RM1.31 billion. Operating expenses climbed to RM295.1 million from RM272.29 million.

For 1HFY19, Nestle said net profit fell to RM392.1 million from RM397.38 million a year earlier. Revenue was higher at RM2.79 billion versus RM2.74 billion in 1HFY18.

"Profit before tax increased slightly from RM509 million to RM512 million, against a backdrop of challenging external conditions, including exchange rates volatility, higher commodity prices and volatile international conditions. Profit after tax reduced slightly to RM392 million due to higher income tax arising from the expiration of investment incentive," it said.

For 2QFY19, the group declared a tax-free dividend of 70 sen a share. The ex and payment dates fall on Sept 13 and Oct 10 this year respectively.

Looking ahead, Nestle said it remains confident in its full-year performance against a backdrop of global uncertainties and volatility.

The group said its fundamentals remain strong and it continues to focus on consumer-driven commercial activities to maintain its growth momentum.

"We will continue driving efficiencies and savings to invest behind our brands and protect our margins to counter rising commodity prices and to manage input costs," Nestle said.

At Bursa Malaysia today, Nestle's share price rose 80 sen or 0.54% to RM149.10 at 12:30pm. The stock saw 17,500 shares traded.