KUALA LUMPUR (Oct 22): Nestle (Malaysia) Bhd's net profit rose 19.4% to RM179.16 million or 76.4 sen a share for the third quarter ended Sept 30, 2015 (3QFY15), from RM150.08 million or 64 sen a share a year ago, on improved cost of sales and lower tax expenses.

Revenue for 3QFY15 also increased 5.3% to RM1.22 billion, from RM1.16 billion in 3QFY14, driven by growth in domestic sales, led by new product launches and the successful ‘Lagi Sihat, Lagi Happy’ consumer campaign, as well as improvements in its export business.

The group declared a second interim dividend of 65 sen per share, amounting to RM152.43 million for the financial year ending Dec 31, 2015 (FY15), payable on Dec 2.

For the nine-month period (9MFY15), Nestle Malaysia’s net profit rose 8.6% to RM490.94 million or 209.36 sen a share, from RM452.08 million or 192.78 sen a share in 9MFY14. However, it saw a marginal 1.6% decline in revenue to RM3.64 billion in 9MFY15, from RM3.7 billion in 9MFY14.

“We are pleased to have delivered these results, amid a challenging economic backdrop. The improved profit is mainly attributable to lower cost of commodities, coupled with the group’s proactive and sustainable cost management along the value chain," said Nestle Malaysia's managing director, Alois Hofbauer, in a statement today.

"By re-investing these savings into trade and consumer promotions, the group was able to strengthen market position for our brands,” he added.

Given the demanding economic climate of reduced consumer confidence and challenged disposable income levels, Hofbauer said the group has adopted a cautious approach for the short-term.

"We are optimistic on the middle to long-term growth in the country. Malaysia is one of the top five Nestlé markets in Asia, and is among the top 20 Nestlé markets in the world. We have great consumer base potential in the future," he said.

Hofbauer also said the group is focused on expanding its manufacturing capacity, as well as developing the capabilities of its talent pool.

"We will also continue to intensify our marketing investments and product innovation efforts, providing consumers with high quality, nutritious, great tasting products, in line with our values as the leader in nutrition, health and wellness,” he added.

Nestle Malaysia’s share price rose 94 sen or 1.32% to close at RM72 today, giving it a market capitalisation of RM16.88 billion.

(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.)