Nestle 1Q profit flat at RM183.5m; no dividend

by **Cals** Fri 18 Apr 2014, 02:36

Business & Markets 2014

Written by Jeffrey Tan of theedgemalaysia.com

Thursday, 17 April 2014 19:04

KUALA LUMPUR (Apr 17): Nestle (Malaysia) Bhd’s net profit was negatively flat at RM183.5 million in the first quarter ended Mar 31, 2014, from RM184.4 million a year ago.

Revenue rose 3.7% year-on-year to RM1.27 billion from RM1.23 billion.

In a statement to the stock exchange, the manufacturer of cereal, milk products and beverages said the flat net profit was due to investments in marketing and promotional activities, linked to the Nestlé "Lebih Kebaikan, Lebih Nilai" campaign.

Nestle said these investments took place in the first quarter that was earlier than in previous years. As a result, the operating profit declined slightly compared to last year’s quarter.

The firm added a lower tax expense, however, offset the shortfall, thus resulting in a flat net profit for the quarter against the same quarter last year.

As for the marginally improved revenue, Nestle said the growth was led by a robust 9.2% growth in domestic performance, which was fuelled by continuous investments in marketing and promotional activities.

But, it added exports sales came in lower compared to the previous corresponding period, which was mainly due to lower demand from affiliated companies.

“We remain cautiously optimistic for the remaining of 2014. The external environment is showing some signs of recovery in the developed world while the emerging markets economies are still experiencing volatility,” said Nestle.

“The group will remain focused on growing both top and bottom line while continuing its long term strategy of investing in manufacturing capacity to support its growth.”