This article first appeared in The Edge Financial Daily on August 28, 2019

KUALA LUMPUR: Nestle (M) Bhd (Nestle Malaysia) reported yesterday a 6% drop in its second-quarter (2Q) 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 yesterday, Nestle Malaysia said its revenue rose to RM1.34 billion for 2Q ended June 30, 2019 (2QFY19) from RM1.31 billion. Operating expenses climbed to RM295.1 million from RM272.29 million.

For 2QFY19, the group declared a dividend of 70 sen a share, payable on Oct 10, comparable with what it announced for the same period last year.

For the first half of FY19, Nestle Malaysia’s net profit slipped 1% to RM392.1 million from RM397.38 million a year earlier, despite revenue climbing 2% to RM2.79 billion from RM2.74 billion.

“Profit after tax reduced slightly to RM392 million due to higher income tax arising from the expiration of investment incentive,” it said.

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