KUALA LUMPUR: Nestle (Malaysia) Bhd recorded a lower net profit of RM197.15 million in the first quarter (Q1) ended March 31, 2023 (FY23) from RM205.18 million a year ago.
This was due to higher commodity prices and unfavourable exchange rates, with various cost mitigation measures implemented to minimise the impact on consumers and protect margins.
However, revenue for the quarter grew 8.8 per cent to RM1.84 billion from RM1.69 billion previously, driven by improved domestic and export sales, which increased by 10 per cent and four per cent, respectively, on the back of a strong baseline in the previous year.
"Performance was very solid both in the core food and beverage (F&B) business as well as the Out-of-Home business under Nestlé Professional, which continued to be on a positive post-pandemic trajectory," the company said in a filing to Bursa Malaysia today.
As a result, Nestle Malaysia posted lower earnings per share (EPS) of 84.07 sen against 87.50 sen previously.
No dividend has been proposed in this quarter.
Looking ahead, Nestle Malaysia said recent disruptions in financial markets have exposed global vulnerabilities, with some downside risks for the global economy potentially affecting its export markets' dynamism.
"Nevertheless, while food commodity prices are expected to remain high through the first half of the year, we are optimistic this will improve in the latter half of the year.
"Over the long-term, we remain confident in the prospects of Malaysia, as demonstrated by our next wave of capital investments, with RM1.0 billion planned for the 2023 – 2025 cycle," it said.
Nestle Malaysia also highlighted that the company is dedicated to accelerating its environmental, social and governance (ESG) objectives with clear plans in place.
It said this includes reducing the company's carbon emissions directly by reducing its emissions and indirectly through its 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, we 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," it added.