NESTLE (Malaysia) Bhd’s net profit fell to RM186.31 mil in the first quarter ended March 31, 2020 from RM235.22 mil in the same period of the previous year.
Revenue for the quarter eased to RM1.43 bil from RM1.45 billion, primarily due to a reduction in domestic sales of 3.4%, which is mitigated by a strong growth in export sales of 8.8%.
The impact on domestic sales was partly due to the anticipated earlier timing of Chinese New Year and the impact of Covid-19 on the out-of-home business, following the closure of restaurants, coffee shops and most other dine-in channels.
“The core food and beverages business remained stable during this period,” Nestle said in a filing with Bursa Malaysia today.
Nestle will be allocating a capital expenditure (capex) of RM280 mil this year, the highest capex in the last six years.
This capex will go into adding new manufacturing capabilities, including an important capacity expansion for its Maggi noodle factory, and the latest production line in Shah Alam, Selangor, in preparation for entry into a new high-growth category with a great future potential.
“While it is difficult to anticipate the full extent of the changes this (Covid-19) crisis will trigger, we are adapting to the challenges of a ‘new normal’ and leveraging new avenues for growth in 2020. We are capturing growth opportunities across all channels, including the e-commerce acceleration,” it said.
“We will continue with our innovation drive and have a strong pipeline of new products coming in the second part of the year. We remain committed to delivering another year of solid and resilient results against a background of uncertainties and external challenges,” it added. — May 5, 2020, Bernama
