Nestle announces 70 sen dividend despite Q3 slump

PETALING JAYA: Nestle (Malaysia) Bhd saw its net profit slump by 25.5% to RM119.75 million in the third quarter ended Sept 30, compared with RM160.71 million registered a year ago, due to an anticipated increase in prices of raw materias such as sugar, milk powder, coffee beans and the devalued ringgit.
Revenue, however, rose 4.77% to RM1.32 billion in the period under review from the RM1.26 billion registered last year, on the back of growth achieved in domestic and exports sales, which grew by 4.2% and 6.8% respectively.
The group announced an interim dividend of 70 sen for the financial year ended Dec 31, 2017.
It said in a bourse filing that effective marketing and trade activities on selected product categories, helped deliver the growth in domestic sales whereas exports benefitted from the good growth registered by its affiliated companies especially those in Asean.
In addition to that, diligent cost management helped in cushioning the effect of the depreciated ringgit.
“This proactive cost management and a different phasing of the marketing investments make us confident of achieving a satisfactory profit situation for the full year 2017,” the board of directors said.
“Based on our cautiously optimistic outlook for the Malaysian economy, we will continue with our ‘Fuel the Growth’ strategy: Striving for efficiency increases all over the supply chain and reinvesting the realised improvements into the sustainable growth of the company by innovating/renovating our portfolio and intensifying our Trade-and Consumer promotions. We are confident that this approach will finally lead us also to a solid profit level,” it added.
For the nine month period net profit fell 10.16% to RM512.51 million from RM570.19 million, which the group said is reflective of its different marketing profit phases, as well as the impact of currency fluctuation.
Nestle’s shares fell 0.2% to RM88 with some 582,800 shares traded.