Nestlé Malaysia confident in sustaining growth momentum in 2022 as 1Q net profit up 17%

KUALA LUMPUR (April 26): Nestlé (Malaysia) Bhd’s net profit for the first quarter ended March 31, 2022 (1QFY22) grew 17.14% to RM205.18 million from RM175.16 million a year earlier underpinned by stronger sales, coupled with lower Covid-19 related expenses.

The improved results were achieved despite the impact of increased commodity prices, as well as the impact of Cukai Makmur (the prosperity tax), said Nestlé in a bourse filing on Tuesday (April 26).

Earnings per share rose to 87.5 sen, compared with 74.7 sen previously.

According to Nestlé, its quarterly revenue rose 16.91% to RM1.69 billion from RM1.45 billion, driven by both higher domestic and export sales. “The strong performance of both the core food and beverage business and the out-of-home business under Nestlé Professional benefited from the increased mobility and reopening of hotel, restaurant and café channels post lockdown."

Compared to the immediate preceding quarter, net profit jumped 83.02% from RM112.1 million for 4QFY21 as revenue rose 16.49% from RM1.47 billion.

The global environment remains very challenging, with widespread inflation gaining traction across the world and also in Asia, aggravated by the war in Ukraine, impacting further prices and availability of key food commodities such as wheat, barley and sunflower oils, noted Nestlé.

“We are confident in sustaining growth momentum across the year even if we see growth levelling down from current high levels in the coming quarters.

“Overall, 2022 is shaping as a year of solid growth in the top line and some pressure on the bottom line as we do our best to balance the tensions on our cost value chain with internal efficiencies and moderate price increases,” said the group.

Despite the foreseeable hurdles, Nestlé said it aims to continue leveraging all possible opportunities to drive another year of solid and resilient results while making meaningful progress in its environmental, social and governance agenda to contribute to Malaysia’s sustainable progress.

In a separate statement, Nestlé Malaysia chief executive officer Juan Aranols said the group remains focused on delivering high-quality, great-tasting and nutritious products that meet the diverse needs of Malaysians, alongside ensuring excellence in consumer communications, digital engagement and in-store activities.

“We continued to accelerate our sustainability agenda during the quarter. 100% of our electricity needs come now from the green tariff enabled by the Ministry of Energy and Natural Resources in 4Q21 (the fourth quarter of 2021)," he added.

At the 12.30pm break, Nestlé’s share price settled at RM132.90, higher by 0.3% or 40 sen, valuing the company at RM31.17 billion.