KUALA LUMPUR: Nestle (Malaysia) Bhd remains confident of another solid year of earnings in 2021 with a first-half net profit of RM309.69mil, 6.12% improved over RM291.84mil in the same period last year.
Year to date, group revenue was RM2.83bil, an improvement of 6.6% over RM2.65bil in the first half of 2020.
The improved performance was mainly driven by domestic sales, which grew 7.7% as the core F&B business recorded a 6.7% increase while the out-of-home (OOH) business continued its gradual but firm recovery against low sales registered in the same period last year.
The bottomline was also supported by lower taxes due to the reinvestment allowance tax incentive for its new plant-based meal solutions manufacturing facility.
The board of directors declared an interim dividend of 70 sen per share, which was equal to the first interim dividend of 2020.
In a statement accompanying the results, Nestle Malaysia CEO Juan Aranols said the main challenge for the remainder of the year will come from the impact of rising food commodity costs due to a progressive normalisation of economic activities.
While these costs were mitigated throughout 1H with hedging policies, the impact will become more noticeable in the months ahead, he added.
However, Aranols added that the group expects good sales growth and a resilient bottom-line performance to close out the year.
For 2QFY21, Nestle's turnover increased 13.2% to RM1.38bil in 2Q, underpinned by a solid performance in the core food and beverage business and some recovery in OOH activities.
Profit after tax in 2Q was RM134.53mil, 27.5% higher over RM105.53mil in the previous corresponding quarter due to the strong topline growth and despite significant Covid-19-related expenses to protect employees and ensure operational continuity.
"Our key priority remains to ensure people’s safety and supply continuity, which has required an immense effort and resilience from all our teams.
"Systematic antigen testing of the workforce and solid containment SOPs have been instrumental in keeping our sales and operations running to fulfil the solid demand we have seen across most of our brands.
"While COVID-19 continues to have an impact in the short term, we continued building capabilities for the future, entering new high growth categories, as well as advancing on our environmental sustainability programmes," said Aranols.
Over 1H, Nestle provided Covid relief worth RM7.5mil to food banks and NGOs to help mitigate the impact of Covid on the community.
It also encouraged Malaysians to get vaccinated through its "Join the fight. Stop Covid 19" initiative, which includes rewards for vaccinated Malaysians with 25,000 vouchers of RM20 each.