Nestle 3Q net profit dips 8.9% to RM79.7m

Nestle 3Q net profit dips 8.9% to RM79.7m

Tags: consumer spending | earnings | MILO | Nestle

Written by Joseph Chin
Thursday, 29 October 2009 17:58

KUALA LUMPUR: NESTLE (M) BHD []'s net profit declined 8.9% to RM79.76 million in its third quarter ended Sept 30 from RM87.54 million a year ago on weaker consumer spending in Malaysia.

It said on Thursday, Oct 29 that revenue slipped 7.8% to RM886.81 million from RM961.82 million. Earnings per share were 34.01 sen compared with 37.33 sen.

"The world economic downturn and uncertain recovery is having a dampening effect on consumer spending in Malaysia. From an export perspective, the quarter saw a reduction in selling prices due to lower commodity costs as well as a shift in demand with higher export sales of Non Dairy Creamer partially offsetting lower sales of milk powders to the Middle East," it said.

Nestle said the domestic market recovery was below its expectations, as the weaker economic conditions saw consumers becoming very cautious in their spending. This translated into lower product consumption affecting the group's domestic sales.

"The price reductions for Milo and milk products ranging between 7% and 12% in February have also contributed to the lower turnover," it added, but this was cushioned by efficiency gains and cost savings, and lower commodity prices.

For the nine-months ended Sept 30, net profit was marginally higher at RM265.57 million versus RM263.61 million. Revenue was RM2.79 billion, down 3.8% from RM2.9 billion.