00:00Trouble is looming for Nestlé Malaysia Berhad as cash-strapped Malaysian consumers are increasingly
00:08ditching the products of the world's biggest food company for cheaper alternatives.
00:14Kananga Research maintained its underperformed call on the stock, saying the recent trend
00:18of consumers down-trading to cheaper brands or its lower-end products has been widespread
00:23across all product categories.
00:26In a note yesterday, it said sustained elevated inflation is eroding consumer purchasing power,
00:31adding that the lingering boycott of certain Western products due to Israel's war on
00:35Gaza is exacerbating the situation.
00:39Kananga said Nestlé Malaysia, a subsidiary of Switzerland-based Nestlé S.A., had indicated
00:44that it would be putting the brakes on price hikes moving forward.
00:48The company had raised prices of its bestsellers, including Milo, Nescafe and Maggi Tomato Ketchup
00:54by approximately 5% to 6% from July 1st to mitigate the rising cost of raw materials.
01:00In a bourse filing on July 26, the group announced a 48.3% drop in net profit for the second
01:06quarter ending June 30, 2024, to Rp. 93.59 million from Rp. 180.91 million a year ago.
01:15Quarterly revenue fell by 13% to Rp. 1.52 billion from Rp. 1.75 billion, attributed
01:21to a decline in domestic sales driven by subdued consumer sentiment and constrained purchasing
01:26power.
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