Nestle remains confident in the prospects of Malaysia
25 Apr 2023
In a statement, chief executive officer Juan Aranols said food commodity prices are expected to remain high through the first half of the year, adding that global turbulence is expected to continue in 2023.
Aranols noted that while headline inflation has started to decline, he pointed out that it is still elevated, compounded by uncertainties in commodity prices and currency rates.
“Recent disruptions in financial markets have also exposed global vulnerabilities, with some downside risks for the global economy affecting potentially the dynamism of our export markets.
Over the long-term, Aranols said Nestle remains confident in the prospects of Malaysia.
He said this was demonstrated by the company’s next wave of capital investments, with RM1bil planned for the 2023 – 2025 cycle.
For the first quarter ended March 31, 2023, Nestle’s net profit dropped to RM197.15mil, compared with RM205.18mil in the previous corresponding period.
In a filing with Bursa Malaysia, Nestle said this was due to higher commodity prices and unfavourable exchange rates, with various cost mitigation measures implemented to minimise the impact on consumers and to protect margins.
Revenue, meanwhile, grew to RM1.84bil from RM1.69bil a year earlier.
“This was driven by improved domestic and export sales, which increased by 10% and 4% respectively on the back of a strong baseline in the previous year.
“Performance was very solid both in the core food and beverage business as well as the out-of-home business under Nestle Professional, which continued to be on a positive post-pandemic trajectory.”
Basic earnings per share stood at 84.07 sen, versus 87.50 previously.
Nestle said its performance continues to be based on delivering high-quality, great-tasting and nutritious products that meet the diverse needs of Malaysians.
“Our wide product portfolio and continuous product innovation help us to remain well in tune with consumers’ expectations.
“This focused strategy is well supported by effective consumer engagement and excellence in sales execution across all relevant channels and platforms, including digital and on-ground activation.”
Reflecting its product innovation focus, Nestle said it introduced exciting offerings in the quarter under review such as the Kit Kat Pink Ice Cream which was a huge success through the Lunar New Year festivities, amongst other Ice Cream innovations.
“The group also rolled out improved taste and texture versions of its Harvest Gourmet plant-based burger, as well as a number of important new launches such as the Starbucks Ready-to-Drink range and the 2023 edition of NESCAFÉ Classic Kopi Kedah, made with 100% Malaysian home-grown coffee beans.
“At the end of the quarter, Maggi introduced its newest Curry Stock Cube, set to become a favourite choice amongst Malaysian home cooks.”
Going forward, Aranols said Nestle remains dedicated to accelerating its environmental, social and governance objectives, with clear plans in place.
“This includes reducing our carbon emissions directly by reducing our emissions and indirectly through our reforestation efforts such as Project RELeaf.
“We will further phase out virgin plastics and support local farmers to transition towards regenerative agriculture through our Farmer Connect programmes.”
In tandem, to drive sustainable growth, Aranols said the company will continue to uphold the trust of Malaysians by reinforcing our capabilities to deliver products that consistently fulfil consumer expectations for quality, nutrition and taste.
Source: The Star