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In a filing with Bursa Malaysia, the fast-moving consumer goods player noted that rising inflation coupled with the ongoing war between Russia-Ukraine would continue to pile pressure on prices.

PETALING JAYA: Given the ongoing disruptions in the global supply chain and sharp rise in the prices of most globally traded commodities, headwinds could arise in the second half of the year, cautions Nestle (M) Bhd.

In a filing with Bursa Malaysia, the fast-moving consumer goods player noted that rising inflation coupled with the ongoing war between Russia-Ukraine would continue to pile pressure on prices.

“This may impact the availability of key food commodities.

“The ringgit’s depreciation against the US dollar further compounds this challenge,” said the group.

Despite the challenging environment, Nestle remains focused on driving sustainable growth for the remainder of the year.

“Despite increased pressure on our bottom line, we will continue to cushion the impact through prudent cost optimisation and tight management of internal efficiencies.

“Our sustainable growth strategy is underpinned by our dedicated environment, social and governance agenda which we continue to accelerate.

“This includes expanding our voluntary extended producer responsibility initiatives, such as our collection and recycling programme,” it noted.

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Nestle is on track to achieve its target of collecting 6,000 tonnes of post-consumer packaging by end-2022, of which 3,000 tonnes will be plastics.

That said, the group said it would continue to make a positive socio-economic impact by supporting communities in need as part of its commitment to contribute to Malaysia.

Meanwhile, Nestle’s net profit rose 26.1% to RM169.65mil in the second quarter ended June 30, 2022 (2Q22) from RM134.52mil a year ago, driven by stronger sales and lower Covid-19 related expenses compared with the same quarter last year.

“This improved performance was achieved despite the impact of increased commodity prices and unfavourable exchange rates, as well as the impact of the Cukai Makmur or prosperity tax on profit after tax,” it said.

The group’s revenue was up 18.8% to RM1.63bil in the quarter compared to RM1.37bil in the corresponding period a year ago supported by both domestic and export sales which increased by 12.5% and 48.1%, respectively.

“Out-of-home channels are recovering further post-lockdowns and travel restrictions.

“With travel restrictions removed, we continued to see consumption acceleration, well supported by our demand generation activities and excellence in operational execution.

“This enabled us to fulfil our promise to deliver Good Food, Good Life through our wide range of products, strengthening communication and deepening our engagement with Malaysian consumers via relevant digital and on-the-ground activities,” it added.

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