Thursday, October 28, 2010

Nestle 3Q net profit up 42% to RM113.18m

KUALA LUMPUR: Nestle (Malaysia) Bhd posted net profit of RM113.18 million in the third quarter ended Sept 30, 2010, up 42% from RM79.76 million a year ago, underpinned by its exports business and improved domestic economy.

It said on Thursday, Oct 28 that revenue rose 11.7% to RM991 million from RM886.8 million. Earnings per share were 48.27 sen compared with 34.01 sen.

Nestle said for 3Q FY10, the higher turnover was contributed by both domestic and exports businesses. The good growth momentum generated by the local economy sustained the consumer demand and spending.

???Leveraging on the improved domestic economic situation, most of the product categories performed well and registered a satisfactory growth. This is quite evident for Nestle liquid drinks and chilled dairy which achieved double digit growth,??? it said. From a channel perspective, both retail and out-of home sales enjoyed good growth.

Nestle said?? capitalising on the investments made in major production lines for coffee and coffee creamers in the past two years, the exports business continued to perform well, registering a strong double digit growth for the quarter.

It added the strong economic growth experienced within the Southeast Asian countries helped generate higher demand for the group's halal products.

However, input cost pressures and product sales mix caused gross profit margin to deteriorate by 110 basis points against the previous corresponding period.

Nestle said less marketing and promotional activities during the quarter and timing of some fixed overhead expenses saw the profit margin before tax improve by 140 bps.

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