Latest news with #NestleMalaysia
Free Malaysia Today
3 days ago
- Business
- Free Malaysia Today
Nestle on road to recovery as boycott sentiment eases
Many Malaysians have opted for cheaper alternatives over Nestle's range of F&B products. (Nestle Malaysia pic) PETALING JAYA : Things are looking up for Nestle (Malaysia) Bhd as rising sales and easing of a consumer boycott precipitated a 20% jump in net profit for its second quarter ended June 30 (Q2 FY2025). Q2 net profit rose to RM112.11 million from RM93.59 million a year ago while revenue increased 9.5% to RM1.67 billion, on the back of higher export and domestic sales. However, for the first six months of FY2025, net profit dipped 5.4% to RM273.45 million from RM289.11 million last year despite revenue rising 4% to RM3.44 billion. Nevertheless, the consensus-beating Q2 earnings saw investors piling into the dividend stock, pushing it up 11% or RM8.60 over the past two days to close at RM85.50, valuing the group at RM20.05 billion. MIDF Research said domestic sales registered positive growth, supported by sustained brand strength, effective pricing execution, and the successful rollout of new product innovations. It added that export sales also held firm, leveraging Nestle Malaysia's role as the group's largest global halal manufacturing hub. The subsidiary of Switzerland-based Nestle SA has been operating in Malaysia since 1912. It is known for its food and beverage offerings including Milo, Maggi and Nescafe, the staple of generations of Malaysians. 'Nestle is gradually recovering from the boycott-related revenue decline and elevated input cost base seen in 2024. We stay cautious but acknowledge its structural strength and recovery potential,' it said in a note today. MIDF maintained its 'hold' recommendation on the stock with an unchanged target price (TP) of RM77.90. Double whammy The current bullish sentiment among investors is understandable given that FY2024 was a year to forget for Nestle Malaysia. Its FY2024 net profit tumbled 37% to RM415.62 million from RM659.87 million in FY2023, the lowest in 14 years. Its Q4 FY2024 net profit plunged 72.2% to RM41.1 million from RM148.1 million a year earlier. The company was hit by a double whammy last year as consumers increasingly ditched its wide range of F&B products for cheaper alternatives while others joined in the boycott against Western brands over the Gaza conflict. Brands such as McDonald's, Starbucks, Burger King and Nestle have come under fire for their perceived association with Israel in the ongoing Middle East conflict. Meanwhile, RHB Research has upgraded its call to 'buy' from 'neutral' and raised its TP for the stock to RM95 from RM77 previously. The research house said Nestle's first-half results were above expectations and expects its recovery to pick up steam, spurred by margin expansion. 'This, together with the demand normalisation stemming from improving sentiment on its brands, lead us to believe its prospects may have turned the corner. 'We upgrade our call to 'buy' as we think its comeback is timely in view of the pick-up in investor appetite for defensive stocks amid uncertain market conditions,' it said in a note today.
Focus Malaysia
4 days ago
- Business
- Focus Malaysia
Boycott pressure persists, but Nestlé leans on efficiency, new launches
NESTLE's reported a sequential revenue decline of -6% quarter-on-quarter (QoQ) in quarter two of 2025 (2Q25) due to the high base effect in 1Q25, which was buoyed by elevated festive season demand. However, on a year-on-year (YoY) basis, revenue improved by +10%, supported by uptick in domestic demand (+6% YoY) and a sharp rebound in export sales (+21% YoY). This underscores Nestle Malaysia's importance as the largest halal-certified production hub within the global Nestle Group, with growing regional demand visibility. The group continues to navigate rising commodity costs through a steadfast focus on operational efficiency, cost savings initiatives, and greater digitalisation. The company remains measured on further price adjustments, recognising the fragile consumer sentiment and the broader impact of inflationary pressures on household spending. Nevertheless, selective price increases have been implemented across certain categories to partially offset cost inflation, executed with a focus on value delivery and minimising volume attrition. 'Despite these efforts, we continue to view the overall sales may continue to be weighed down by a fragile external environment, as the ongoing boycott against Western-affiliated brands continues to dampen demand, and are unlikely to fully revert to baseline levels in the near term,' said Hong Leong Investment Bank (HLIB). The group reaffirmed its strategic focus on product innovation and portfolio renewal to drive incremental consumption. Recent launches include Omega Gold Triple Action, Energecal Complete, Maggi Air Fryer Series, Milo Biscuits, Kit kat 3-in-1, and Nescafé Coffee Concentrate, with the latter highlighted as a key innovation aligned to global strategic priorities. Nestlé continues to strengthen its presence in health-focused and convenience-driven categories, in tandem with evolving consumer preferences. Management remains confident that innovation-led demand and category expansion will support growth and mitigate brand dilution from external political noise. HLIB reiterate hold for Nestle with unchanged target price of RM80.00. Additionally, they reckon the boycott sentiment coupled with the cost pressure will continue to put a strain on its earnings moving forward. —July 28, 2025 Main image: Nestle Professional
New Straits Times
25-07-2025
- Business
- New Straits Times
Rising material costs may weigh down Nestle Malaysia's performance
KUALA LUMPUR: Nestle (Malaysia) Bhd may record softer results in the second half of the year, weighed down by rising raw material costs, especially for coffee beans and cocoa and the lack of major festive events. However, CIMB Securities expects the company's performance in the second half to improve on a yearly basis, supported by growth in both domestic and export sales. "On the domestic front, we expect gradual demand recovery as consumer sentiment normalises amid fading boycott impact. "Export sales are also likely to improve, leveraging Nestlé Malaysia's position as Nestlé Group's global halal manufacturing and export hub," it said. The firm also expects margin improvement driven by price hikes implemented in the first half of 2025, a more profitable product mix featuring higher prices on selected items, and ongoing cost-efficiency measures. Meanwhile, Hong Leong Investment Bank Bhd (HLIB) said Nestle Malaysia continues to face a tough operating landscape, pressured by volatile commodity prices, weakened consumer sentiment and lingering geopolitical uncertainties. "While ceasefire talks in the Israel-Gaza conflict offer some relief, we expect a gradual normalisation in sales," it added. HLIB said Nestle Malaysia has made notable strides in its sustainability efforts, including signing a memorandum of understanding with the Malaysian Sustainable Palm Oil organisation. HLIB adjusted its earnings projections upward by seven per cent for 2025, 6 per cent for 2026, and five per cent for 2027 to reflect the stronger-than-expected results. Both firms have reiterated their "Hold" recommendations on Nestle Malaysia, with HLIB raising its target price slightly to RM80 from RM78, while CIMB Securities maintained its target at RM86.20.
The Sun
24-07-2025
- Business
- The Sun
Nestle Malaysia's Q2 earnings boosted by strong sales momentum
PETALING JAYA: Nestle Malaysia delivered positive sales growth for the first half of 2025, driven by solid acceleration in its second quarter ended June 30, 2025 (Q2'25). In Q2'25, the company recorded a turnover of RM1.67 billion, an increase from RM1.52 billion in Q2'24. For the quarter, Nestle Malaysia delivered a higher profit before tax of RM148.6 million and profit after tax of RM112.1 million, both marking double-digit growth against the Q2'24 baseline. The strong sales momentum in the second quarter was broad-based across brands and reflects further sales progress following successful Chinese New Year and Ramadan/Hari Raya campaigns in the first quarter. Nestle Malaysia announced a first interim dividend of 70 sen per share, the same amount as in the prior year. Alongside domestic sales, the company's export business accelerated, confirming Nestle Malaysia's international competitiveness, while continuing to leverage its role as the largest halal manufacturing hub for the Nestle Group worldwide. In a statement yesterday, the company said this performance underscores its ability to manage margins amid sustained volatility in commodity prices through the systematic application of the Nestle Virtuous Circle framework. CEO Juan Aranols said, 'The second quarter results validate our earlier guidance of returning to healthy growth by H1 2025. Amid market volatility and intense competition, we continued to drive strong brand plans with effective execution across all sales channels. We remain committed to continue honouring the trust Malaysians place in our brands and products, always Halal-certified and proudly made in Malaysia, by Malaysians and for Malaysians.' Throughout the quarter, Nestle Malaysia maintained its focus on the strong drivers of preference for its brands and product offerings in an evolving marketplace, namely those associated with quality, taste and nutritional relevance. In combination with its wide distribution network and best-in-class commercial execution, the company's core products performed well, complemented by product innovations that have been positively received by consumers, helping to sustain market leadership positions. In Q2'25, Nestle Malaysia continued to advance its environmental, social and governance efforts through impactful collaborations and sustainability initiatives. To further strengthen its commitment to responsible sourcing, the company signed a memorandum of understanding with the Malaysian Sustainable Palm Oil (MSPO) to uphold good trade and sourcing best practices that meet international requirements. Nestle further advanced its commitment to reenergise cocoa farming in Malaysia, as showcased during the Malaysian International Cocoa Fair 2025 where the company reinforced its ambition to source 10,000 tonnes of locally grown cocoa by 2034. 'Our focus remains on delivering shared value to both local communities and the environment. Each of these efforts is a step toward shaping a more inclusive, sustainable future for Malaysia,' said Aranols. 'As we navigate through the second half of 2025, we remain confident in our ability to drive solid growth momentum and profit recovery through the coming quarters,' he said, adding that they are mindful and vigilant of the geopolitical uncertainties that may impact the business environment in Malaysia. For the six months period to June 30, 2025, Nestle Malaysia's net profit fell to RM273.45 million from RM289.11 millionl in H1'24 although revenue rose to RM3.44 billion from RM3.31 billion in the corresponding period in 2024.
The Sun
17-07-2025
- General
- The Sun
Nestle annual coastal clean-up in Terengganu
MALAYSIA's east coast is known for its coral reefs and rich fishing grounds that sustain both biodiversity and the livelihoods of local fishing communities. But in recent years, growing plastic waste has posed increasing challenges to these fragile ecosystems, says Nestle Malaysia. From discarded packaging to ghost nets abandoned at sea, marine debris is putting pressure on traditional fishing areas relied on by generations of local families. 'Alarmingly, Malaysia is claimed to be among the top 10 countries globally for microplastic ingestion. A 2024 study published in the Environmental Science and Technology journal found that Malaysians consume an average of 502.3mg of microplastics daily, with more than half coming from seafood. For fishing communities, more than an environmental issue, this is a matter of long-term survival.' In response to this urgent challenge, Nestle Malaysia brought its annual Coastal and Underwater Clean-Up to Terengganu recently with a renewed mission. For the first time, the initiative brought together not only employee volunteers from Nestle's Sayang Komuniti programme, but also marine researchers from Universiti Malaysia Terengganu (UMT), representatives from the Fisheries Development Authority of Malaysia (LKIM) and villagers from the Pantai Tok Jembal fishing community. This effort saw more than 350 volunteers carry out a range of activities at two locations. At Pantai Tok Jembal, teams worked side-by-side with villagers to clear plastic waste along the coast, remove barnacles from fishing boats, repair fishing huts and distribute basic provisions to the local community. The programme continued at Pulau Bidong, which saw Nestle volunteers and UMT's 'Ocean Heroes' with the support of the Malaysian Maritime Enforcement Agency conduct an underwater cleanup targeting ghost nets, which pose a serious threat to coral reefs and marine life. Nestle Malaysia CEO Juan Aranols said: 'At Nestle, our Creating Shared Value approach drives us to create lasting benefits for both people and the planet. Our ambition to achieve plastic neutrality compels us to work hand-in-hand with local stakeholders to remove plastic waste from the environment and embed sustainable practices across our value chain. 'This collaboration in Terengganu with our partners and the community of Pantai Tok Jembal, reflects our deep commitment to protecting natural ecosystems while supporting those whose livelihoods depend on them. With microplastics increasingly threatening our food systems, initiatives like this are not only vital for environmental health but also for strengthening Malaysia's food security, food safety and the long-term resilience of our coastal communities.' UMT's Microplastic Research Interest Group researcher Professor Madya Dr Yusof Shuaib Ibrahim said: 'Removing ghost nets is crucial, as they break down into microplastics that harm coral reefs, marine life and ultimately human health through the food chain. Many cleanups focus only on beaches, but this collaboration with Nestle sets a new benchmark by tackling underwater pollution. 'Through waste audits, we gather vital data to trace pollution sources and better understand how even small acts of mismanaged plastic can lead to wider harm. This also connects academic research with real-world impact, showcasing how industry-academia partnerships can lead the way in long-term environmental stewardship.' A Pantai Tok Jembal fisherman, Rahmat Zamri, said: 'Plastic pollution and ghost nets have really affected our fishing activities and our catch has been decreasing. The beach has changed too; it used to be very clean. We welcome the visitors and local businesses, but the rubbish left behind is a growing concern. We do our best to keep the area clean, but it's not easy. 'That's why I'm truly grateful for this cleanup programme. It helps protect our environment and our livelihoods. When a company like Nestle works with us, I hope it inspires more positive change and reminds people to treat the ocean with more respect.' Nestle Malaysia stated that as plastic pollution continues to threaten ocean health and human well-being, initiatives such as this showcase that bringing about real change requires collective responsibility. 'Whether removing ghost nets, clearing plastic waste or raising awareness, each action contributes to a cleaner, safer future. 'While Terengganu was a focal point this year, similar coastal cleanup efforts were also carried out by Nestle at locations in Selangor, Perak and Sabah, bringing together over 500 volunteers nationwide. The initiative successfully removed a total of almost 1.7 tonnes of marine waste, a clear reflection of what can be achieved when companies and communities work together.' Volunteers from Nestle Malaysia and UMT clean barnacles off fishing boats at Pantai Tok Jembal to help improve safety and efficiency, as part of Nestle's 2025 coastal cleanup.
