Friday, November 4, 2011

Nestle posts flat 3Q earnings of RM110m on higher raw materials

KUALA LUMPUR (Nov 4): Nestle (Malaysia) Bhd posted net profit of RM110 million in the third quarter ended Sept 30, 2011 marginally lower from the RM113.18 million a year ago as profit margins were affected by higher prices of key raw materials

It said on Friday that operating profit was RM143.16 million, up 3.8% from RM137.83 million. Revenue rose 18.2% to RM1.171 billion from RM991.07 million, boosted by strong domestic and exports sales. Earnings per share were 46.91 sen compared with 48.27 sen.

'The good domestic growth performance was noted for all categories and some with double digit especially for milks, coffee and beverage, confectionery as well as Nestle liquid drinks. The encouraging sales were further driven by higher demand during the fasting month, followed by Hari Raya celebrations,' it said.

Nestle added the sustained economic growth in the region helped drive the group's export performance. The increase demand for coffee creamers and soluble coffees within the Asean region contributed to the strong double digit export growth.

However,'' escalating prices of key raw materials consumed by the group such as coffee beans, cocoa powder, skimmed milk powder and palm oil have negatively impacted the gross profit margin which reduced by 230bps, despite increasing by 10.3% in absolute terms.

For the nine-month period, its earnings rose 4.8% to RM369.23 million from RM352.14 million. Its revenue increased by 14.6% to RM3.51 billion from RM3.06 billion driven by both domestic and export sales.

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