Nestlé (Malaysia) Bhd’s earnings for the third quarter (Q3) ended September 30, 2021 were boosted by strong demand for its food and beverage (F&B) products, as well as exports.
Due to strong sales growth of 3.4 percent in the domestic market and 4.5 percent in the export market, turnover for the quarter increased by 3.6 percent to RM1.44 billion from RM1.39 billion in the same quarter last year.
Despite the Enhanced Movement Control Order (EMCO) restrictions in Q3 2021, which harmed Nestlé Professional’s out-of-home (OOH) business, the company’s F&B business grew by 5.5 percent in Q321, resulting in higher earnings.
CEO Juan Aranols saiys the company had a strong quarter, “We have continued to ensure stable supply to meet the high demand for our brands while ramping up product innovation and accelerating our environmental actions.”
Thanks to improved top-line growth and lower marketing expenses, the company’s profit before tax (PBT) and profit after tax (PAT) increased to RM207.6 million and RM148.0 million, respectively, as EMCO restrictions limited the company’s marketing activities.
Furthermore, higher commodity prices and pandemic-related expenses, which remained significant in Q3 2021, tempered improved profitability.
Nestlé Malaysia’s turnover increased by 5.6 percent to RM4.27 billion in the first nine months of 2021, compared to RM4.04 billion the previous year, mainly driven by domestic sales, which grew by 6.3 percent, as the retail F&B business recorded a 6.2 percent increase.
PBT increased by 8.9 per cent to RM605.0 million while PAT increased by 8.9 per cent to RM457.7 million in the first nine months of the year compared to the same period last year.
Moving forward, Nestle Malaysia expects rising food commodity costs to be the main challenge in the fourth quarter, according to Arnolds.
“We anticipate a greater impact in the coming months, particularly in 2022.”
“We are confident, however, that we will maintain our positive momentum in 2021 and deliver another year of strong results,” he says.
