1Q revenue up, profit down at Nestlé Lanka

Wednesday, 23 May 2012 00:13 - - {{hitsCtrl.values.hits}}

Nestlé Lanka Plc, has recorded a strong revenue growth of 14% (YoY) for the three months ending 31 March 2012, posting a revenue of Rs. 7.3 billion and a net profit of Rs. 462 million amidst a difficult market environment.

The Company stated that net profit for Q1 were down 25% (YoY) due to the currency depreciation effected early on this year and the rise in fuel and energy costs which resulted in a significant increase of costs for its manufacturing operations. However Nestlé continued its investment commitment to the country in Q1 despite trying economic conditions with a new noodle manufacturing plant to increase output for its popular MAGGI Noodles range in Sri Lanka and also a new UHT milk plant to further expand the company’s capacity for its popular dairy based beverages. These investments are part of the company’s LKR 10 billion investment plan for dairy development and manufacturing capacity expansion in the Beverages, Culinary and other areas over the next few years.

“2012 is turning out to be a testing year. We are operating in an even more difficult environment than the year before and are facing multiple challenges. While we have delivered a strong revenue growth, various external elements have had a significant impact on our Q1 net profit. However it is with pride that we note that we have been able to uphold our commitment to ‘Creating Shared Value’ for Nestlé and our local communities during this difficult time. We still continue with our investment commitments to Sri Lanka and have even increased our local milk procurement to support our local dairy farmers as best we can,” Nestle Lanka Managing Director Alois Hofbauer.

He added that Nestlé had increased its local fresh milk collection by 48% (YoY) during the first quarter (January to March 2012).

Nestlé has continued to be recognised by the local business community and consumers in Q1 for its world renowned products and manufacturing operations. Its premium NESCAFÉ brand clinched the People’s choice award for ‘Hot Beverage Brand of the Year’ at the SLIM-Nielsen Peoples Awards 2012 and its state-of-the-art manufacturing facility in Kurunegala won bronze at the National Cleaner Production Awards for environmentally friendly operations. Q1 also saw the company enhance its popular MAGGI noodles range in Sri Lanka by launching a new range of instant noodle products for the youth of this country – the ‘hot and spicy’ MAGGI Devilled noodles – with new indigenous flavours to cater to changing consumer needs.