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PETALING JAYA: Against a background defined by constrained purchasing power, subdued consumer sentiment and cautious spending throughout the Chinese New Year and Hari Raya festive seasons, Nestlé Malaysia sales reached RM3.3 billion for the first half of 2024 (H1), a correction of 8% versus the historically high record sales achieved for the first half of 2023. The cumulated sales are on par with the very solid sales achieved in the first half of 2022. Meanwhile, sales for the second quarter ended June 30, 2024 reached RM1.52 billion, down from RM1.75 billion achieved in the equivalent period of 2023.
Nestlé (Malaysia) Berhad CEO, Juan Aranols said: “The current environment continues to reflect subdued consumer sentiment and constrained purchasing power impacted particularly by the cumulated inflation in food and other basic items. We recognise the significant challenges this represents for Malaysian families.”
At Nestlé Malaysia, he added they remain focused on providing solid value propositions across their brands and products that meet the expectations of Malaysians.
“We continue to work tirelessly to improve the nutritional profile of our products and testament to this is, as an example, the Healthier Choice Logo for Milo by the Ministry of Health. We have also brought to market a number of relevant innovations such as Kit Kat Dark Borneo, made with cocoa beans from Sabah and Sarawak, sourced via our Nestlé Borneo Cocoa initiative, in partnership with the Malaysian Cocoa Board,” he said.
Profitability for the quarter and for the half year, while contracting versus the high baseline periods of comparison in 2023, remained at a healthy level, with H1 Profit Before Tax at RM385 million and H1 Profit After Tax at RM289.1 million, allowing the Company to declare a first interim dividend payment of RM0.70 per share, the same level as the prior year.
When commenting on the profitability evolution for H1, Aranols said, “We recognise the significant challenges that high food costs, driven by the global situation of commodity prices, create for Malaysian families. That is why we continue to make every possible effort to moderate the translation to our final prices of these external cost increases, absorbing them to the best of our ability and mitigating cost pressure through all possible actions, including the constant search for internal process efficiencies and the adoption of digital-enabled technologies across our entire value chain.”
Looking ahead, he said they expect challenging conditions to remain throughout the third quarter and moderate progressively towards the end of the year, with a return to growth latest by H1 2025.
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