Retail News CRM

Category: Food

Retail News Asia is committed to providing both local and global retailers with the latest Food and Food & Beverage news throughout the Asian market. This on a daily base.

  • % Arabica announces Singapore launch

    % Arabica announces Singapore launch

    Kyoto-headquartered coffee chain % Arabica Coffee is to open its first store in Singapore.

    The company has revealed the location on Instagram: 56 Arab Street. With a fit-out yet to be completed, the store may not open until the end of the year.

    The company has also confirmed it is currently fitting out its first store in Indonesia, with others destined for Malaysia and India.

    With its slogan “See the world through coffee”, % Arabica Coffee has built a strong following via social media. In Asia it has three stores in Japan, three in Hong Kong, one in the Philippines and two in China. It is also in Germany and several Middle East markets, with plans for France, Morocco and Canada.

    % Arabica Coffee was founded in 2014 by Japan-born Kenneth Shoji who grew a love for the beverage while studying in California.

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  • Popeyes Brand to Launch in the Philippines

    Popeyes Brand to Launch in the Philippines

    The first Popeyes Philippines store is imminent.

    Popeyes, the US fast-food chain, has signed a master franchise agreement for the country with local operator Kuya J Holdings.

    Popeyes’ president Alexandre Santoro said he believed the brand’s friend chicken offer will resonate well with guests in the Philippines.

    Kuya J Group’s chairman Lowell L Yu said: “The Philippines is a large and growing market, and we are looking forward to serving the high-quality food that Popeyes offers to the country’s more than 100 million people.”

    Popeyes was founded in 1972 and serves cuisine based on its Louisiana heritage. It has more than 2900 restaurants in the US and around the world. In Asia it is already established in Vietnam, Singapore, Malaysia and Hong Kong.

    It is expected the first Popeyes Philippines store will open in Manila.

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  • Vietnam instant noodles consumption blooms

    Vietnam instant noodles consumption blooms

    Vietnam was the world’s fifth largest instant noodles consumer in 2017, consuming 5.06 billion packs.

    This marked a 2.8 percent increase from 4.92 billion in 2016, according to the World Instant Noodles Association (WINA).

    Vietnam had held the fourth spot since 2012, but this was taken by India last year, with a consumption of 5.4 billion packs.

    Other countries in the top five were China (38.9 billion packs); Indonesia (12.6 billion); and Japan (5.6 billion).

    With population over 93 million, Vietnam is second among 2017’s top 3 countries with the highest per capita instant noodles consumption at 53.5 servings; behind South Korea with 73.7 servings and above Nepal with 51.1 servings.

    In 2016, the average Vietnamese person gobbled 53 packs of instant noodles, higher than Indonesians at 49, Japanese at 44 and Chinese people at 38.

    Local enterprises have tapped into this huge market by partnering with overseas companies, increasing the options manifold for the Vietnamese consumer.

    Domestic instant noodle enterprises have reported rising sales, reflecting the increasing consumption.

    A representative of the Acecook Vietnam Joint Stock Company said that the company has seen an eight percent year-on-year increase in revenues in the first half this year.

    Similarly, the Colusa – Milike Food Joint Stock Company reported a net profit of $12.1 million in the first six months, a 10 percent increase from the same period last year.

    Globally, some 100 billion servings of instant noodles were sold in 2017, an average of 270 million packages consumed per day.

    FoodDive, an online news site in food industry, quoted an IMARC Group report as saying the global instant noodles market value reached $40 billion in 2017 and is expected to reach $55 billion in 2023.

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  • ThaiBev to intensify Vietnam focus after lackluster 3Q

    ThaiBev to intensify Vietnam focus after lackluster 3Q

    Thai Beverage on Wednesday announced plans to double down on the Vietnam beer market after posting disappointing third-quarter results.

    It said it will focus on optimal use of its 54 percent stake in Vietnam’s largest brewery Saigon Beer Alcohol Beverage Corp (Sabeco), known for its Saigon Special beer.

    It is reported that although the firm acquired its stake in Sabeco last December, ThaiBev only began conducting due diligence of the brewery’s production facilities recently, after its current CEO, Bennett Neo Gim Siong, was appointed on August 1.

    The firm stated it was working on several areas to boost Sabeco’s performance, including procurement, marketing and R&D.

    ThaiBev officials said they were optimistic about Sabeco’s potential and profitability in Vietnam’s beer market.

    The latest announcement came after ThaiBev on Tuesday posted a net profit of 5.99 billion baht ($180 million) for the third quarter ending June 30, a 61 percent fall from 15.23 billion baht ($458 million) a year ago.

    The drop was attributed to several factors, one of them an increase in net losses from the non-alcoholic beverage business.

    Last year, Sabeco produced nearly 1.8 trillion litres of beer, recording sales of VND35.2 trillion ($1.56 billion) and an after-tax profit of VND4.95 trillion ($199.5 million).

    It exported 28.6 million liters of beer for over $15 million.

    Vietnam is the biggest beer market in Southeast Asia, consuming nearly four billion liters last year.

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  • China expansion gives good result for Jumbo Group

    China expansion gives good result for Jumbo Group

    Singaporean restaurant chain Jumbo Group has announced sales of S$35.8 million for the three-months to June 30, boosted by new outlets in China.

    Two new restaurants opened in Beijing and Shanghai, combined with a recently opened venue in Xi’an’s SKP luxury mall, increased revenue for the quarter by $1.8 million comparative to last year’s figures for the corresponding period. The group has also recently launched one of its franchises in Taiwan.

    Despite the revenue growth, overall profit attributable to owners of the company showed a decrease of $1.2 million from the same quarter last year, down to $2.2 million. This was attributed to the closure of two outlets in Singapore, rising costs of materials and fresh seafood, and staffing and promotional costs for launching the Chinese stores.

    The firm’s gross profit margin was correspondingly lower at 62 per cent during the quarter, compared to 62.7 per cent last year.

    The group’s executive director and CEO Ang Kiam Meng said he was heartened the business’s expansion in the region has borne fruit.

    “On the domestic front, we see an overwhelming response at the new Tsui Wah outlet at Clarke Quay. This is in line with our strategy to increase the vibrancy of our business and Singapore’s food and beverage landscape. As a growing business, there will be a gestation period as reflected in our latest set of financial results. We are confident that we will be able to produce a sustainable performance as we expand our footprint regionally and strengthen our position.”

    The group will continue to expand across the region in the coming year, with new outlets planned for Thailand, Taiwan, China and Singapore.

  • Dip in Indian rates on rupee weakness dulls Vietnam offers

    Dip in Indian rates on rupee weakness dulls Vietnam offers

    Rice export prices in India fell this week as the rupee weakened, weighing on demand for the Vietnamese variety.

    Rates for India’s 5 percent broken parboiled rice fell by $3 per tonne to $389-$393 per tonne this week.

    “Rupee depreciation is allowing us to lower prices, but at the same time competitors are also lowering their quotes,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.

    The Indian currency fell to a record low against the dollar on Thursday.

    Farmers in India had planted summer-sown paddy rice on 30.78 million hectares as of Aug 10, down 2.9 percent from a year ago due to scant rainfall.

    Monsoon rains in India are likely to be below-normal levels in 2018, a private weather forecaster said earlier this month, raising concerns over farm output and economic growth in Asia’s third-biggest economy, where half the farmland lacks irrigation.

    The falling rice prices in India also weighed on the market in Vietnam, the third largest exporter, but rates for the country’s 5 percent broken variety were unchanged at $395-$400 a tonne.

    “Trade is slow as Vietnamese prices are comparatively higher, especially compared with Indian prices … Exporters have lost their African customers to Indian rivals due to that,” a Ho chi Minh City-based trader said.

    Vietnam exported 444,235 tonnes of rice in July, down 17.4 percent from June, government customs data released late last week showed. That was slightly lower than a government forecast of 450,000 tonnes.

    In Thailand, the world’s second biggest rice exporter, demand also remained soft, traders said.

    Thailand’s benchmark 5 percent broken rice price was quoted at $390-$393, free on board (FOB) Bangkok, little changed from last week’s $390-$395.

    The commerce ministry on Wednesday said Thailand had exported 6.99 million tonnes of rice worth 3.52 billion baht this year by August 15, a 2 percent increase from a year ago.

    Meanwhile, Bangladesh, which had emerged as a major importer of rice since 2017 after floods damaged its crops, continued to procure rice domestically.

    In the 2017-18 financial year that ended in June, Bangladesh imported a record 5.7 million tonnes of rice. However, imports dropped sharply after the government imposed a 28 percent tax on shipments to support its farmers following a revival in local output.

    Rice at government warehouses stood at nearly 1.3 million tonnes, data from the country’s food ministry showed.

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  • Vietnam to expand banana farming for China export

    Vietnam to expand banana farming for China export

    A Vietnamese agriculture company, Hoang Anh Gia Lai Agriculture Jsc, is set to invest in another 5,000 hectares of land in Cambodia to grow bananas for export to China.

    It will invest VND976 billion ($42 million) in the project, the company said in a recent statement.

    Most of the bananas will be exported to China by ship or road. They will fetch VND22,000-23,000 (95-99 cents) per kilogram from September to March and VND13,000-14,000 (56-60 cents) at other times.

    While China has a demand for 15 million tons of bananas a year, the company has only been supplying 240,000 tons, Doan Nguyen Duc, CEO of Hoang Anh Gia Lai (HAGL) Agrico, said.

    But to reduce its excessive reliance on the Chinese market, Duc is also hoping to shift 20 percent of the company’s banana exports to South Korea and Japan.

    It expects to harvest over 106,000 tons of bananas and earn revenues of around VND1.7 trillion ($73 million) and VND983 billion ($42 million) in gross profit this year.

    The company already possesses 13,500 ha of farmlands in Vietnam, Laos and Cambodia. It is also a major producer and exporter of dragon fruit and chili.

    HAGL used to be a leading property developer in Vietnam, but restructured in 2010 to focus on rubber and livestock farming.

    HAGL Agrico has been growing fruits since 2016, and last year its passion fruit, banana, chili, and dragon fruit crops fetched revenues of VND1.6 trillion ($71 million), accounting for around 49 percent of HAGL’s total revenues.

    This year, the firm expects sales of VND3.7 trillion ($164.4 million) and gross profits of VND1.67 trillion ($74.2 million).

  • Global chains suffer as Vietnamese coffee lovers vote with their feet

    Global chains suffer as Vietnamese coffee lovers vote with their feet

    Local coffee shop chains are outmaneuvering international brands like Starbucks by catering to customers’ demands.

    Young customers are now choosing smaller brands like The Coffee House, Cong Ca Phe and Phuc Long as their to-go spot for affordable brews.

    Local brands not only offer many beverage options but also sophisticated interiors and unlimited and fast internet access to ensure they retain customers, Nikkei Asia Review quoted market researcher Nguyen Phuong as saying.

    All this has helped these brands become very popular among students and young working professionals, who can spend hours there yet feel welcome.

    Phuong said having knowledge of Vietnamese culture and consumers has helped the local brands attract customers.

    By changing their business models to fit customers’ tastes, local brands report growing and some are even looking to expand.

    Nguyen Hai Ninh, CEO of what is thought to be the fastest growing chain, The Coffee House, told Nikkei that he plans to open 700 outlets around Vietnam in the next five years, or around 10 a month.

    Just one month after the brand opened its first shop in Seoul last month, Cong Ca Phe plans to add two more stores in the South Korean capital.

    The chain, which debuted in 2007, has more than 50 stores around Vietnam, and intends to add one or two every month until 2020.

    Thuc Coffee, Urban Coffee Station and Phuc Long report 7 percent annual revenue growth.

    In contrast, international names like Starbucks have grown slower than expected in the Vietnamese market.

    Starbucks only has 38 stores after entering the market five years ago despite boasting huge numbers in neighboring countries such as Thailand (330 stores), Indonesia (320) and Malaysia (190).

    Meanwhile, NYDC, Gloria Jean’s Coffees, and Caffe Bene of Korea have all wound up or are close to doing so.

    Singapore-based NYDC closed its last store in July 2017, Australian brand Gloria Jean’s Coffee also closed its last store in April 2017 after a decade of slow growth.

    Caffe Bene now has only three outlets remaining, according to InsideRetail Asia.

    Talking about the reason for the failure of international brands in the domestic market, industry insiders said that high rents on premium land have raised the cost of retail prices, making their coffee less competitive than local ones.

    A local coffee shop owner told Nikkei that opening a 200-square-meter Starbucks store in Saigon requires an initial investment of $215,000, while Coffee House only needs $86,000.

    Sean T Ngo, CEO of VF Franchise Consulting, said Vietnam, a major exporter of Robusta coffee, imposes high import tariffs on coffee beans, and international coffee chains often use imported Arabica beans that raise costs significantly. Higher costs have driven many customers to domestic brands.

    Phuong said that another reason for the downfall is that old brands are slow to adjust their business models to match customers’ taste.

  • Creamistry China to open 100 more stores as mid-term plan

    Creamistry China to open 100 more stores as mid-term plan

    Californian ice cream chain Creamistry has opened its first franchised store in China.

    And the local franchisee, HZ America Corp, plans to open more than 100 Creamistry China outlets within four years.

    Creamistry specialises in made-to-order liquid nitrogen ice cream using all-natural and organic ingredients, adding theatre to the retail sale of ice creams and frozen desserts.

    The inaugural Creamistry China store opened on South Renmin Road in Chengdu. HZ America has the franchise rights to the brand for all of greater China.

    “We are thrilled to launch Creamistry in an untapped market such as China with phenomenal brand area representatives,” says Jay Yim, Creamistry’s founder and CEO.

    “Our experience with premium-quality product coupled with the operations infrastructure in place positions us perfectly to get Creamistry up and running in China.”

    Creamistry of Chengdu will sell localised flavors including Spicy Yolk, made with salty duck egg yolk and a combination of spices; Chengdu, made with the Chinese liquor Luzhou Laojiao; and Rice Wine, made with real fermented rice liquor.

    “Creamistry is far more than just an ice cream shop – it truly is an experience,” says Yim. “The brand’s wild success and rapid growth is a testament to the completely customizable product and unique atmosphere, which has proven to appeal to consumers worldwide.”

    Yim founded Creamistry in 2013 after seeing a street vendor making liquid nitrogen ice cream in South Korea.

    After two years of experimentation his family team tested more than 100 flavours before settling on the chain’s core menu.

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  • Chinese brands grab 39 percent of Vietnam smartphone market

    Chinese brands grab 39 percent of Vietnam smartphone market

    Xiaomi and Huawei were the two fastest growing mobile phone brands in Vietnam in the second quarter, technology industry analyst Counterpoint reports.

    They grew respectively by 363 percent and 193 percent, according to the HongKong-based company’s recent release.

    “Further, amid the US-China trade war, the RMB (renminbi) is weakening, resulting in cheaper Chinese products in Vietnam. This will favor the Chinese brands, which now hold around 39 percent of the market in Vietnam,” said Tarun Pathak, Counterpoint associate director.

    Vietnamese smartphone brands face stiff competition from not only Chinese but also other international brands, he said.

    The report noted that Xiaomi had only 1 percent of the market share in the second quarter of 2017, but it surged to 5 percent a year later.

    Overall, Chinese brands have a market share of around 39 percent in the form of Oppo (22 percent), Xiaomi (5), Huawei (5), and other smaller names.

    Besides, the report said Huawei has tied up with local gaming firm VNG to enter the industry.

    Varun Mishra, a research analyst, added that Chinese companies such as Alibaba, JD.com and Tencent have invested heavily in the Vietnamese e-commerce market, which would give a “further boost to the Chinese players who have leveraged both offline and online platforms to sustain growth in similar markets.”

    “While the Chinese players are actively targeting mid-tier segments, local players are being pushed toward the entry level segment.”

    South Korean giant Samsung still dominates the smartphone market with a 37 percent share.

    Vietnamese conglomerate Vingroup has also entered the market. Vingroup hopes to launch its phones next year.

    By the end of March 2018, Vietnam has 118.7 million mobile subscriptions, according to official data.

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  • Kenny Rogers Roasters, Jollibean to enter India market

    Kenny Rogers Roasters, Jollibean to enter India market

    The Kenny Rogers Roasters and Jollibean food retail brands are to launch in India.

    Malaysia’s Berjaya Food has signed a preliminary franchise partnership deal with India’s World Iconic Brands Hospitality (WIB) to take the banners into the new market.

    WIB will invest US$50 million to open 30 Kenny Rogers Roasters restaurants and 75 Jollibean kiosks in India over the next five years.

    Berjaya Food owns the two chains as well as operating Starbucks in Malaysia and Brunei.

    CEO Sydney Quays describes India as “a stepping stone” for the company to expand into more foreign markets.

    “We have a lot of interest from Southeast Asian countries,” he told the Sun Daily.

    With 970 shopping malls and more than 200 airports, India represents a strong potential market for both the brands, said WIB MD Gaurav Marya.

    “We’ll spend the next six to eight months to get the model right, understand the preference of consumers and we will scale up the business,” he said.

    The first new outlet will open early next year.

    WIB is a subsidiary of Franchise India, Asia’s largest integrated franchise solutions company, which manages 400 brands.

    Kenny Rogers Roaster restaurants already operate in Malaysia, the Philippines, Singapore, Indonesia, Thailand, Bangladesh, India and Dubai, while India is only the second offshore market for Jollibean, after Singapore.

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  • A&W Malaysia reveals big expansion plan

    A&W Malaysia reveals big expansion plan

    Fast-food franchise A&W Malaysia is set to open around a dozen new outlets by next year.

    The group currently operates 41 outlets in Kuala Lumpur and Perak that collectively employ 500 people.

    Acting CEO Mohd Hasmadi Zainal said that the company has allocated around RM1.2 million (US$292,500) for each new branch. Seven branches will be opened by the end of this year, five of which will feature drive-through services, in key metropolitan locations such as Kuala Lumpur, Johor Bahru, Ipoh and Penang.

    He added that better prospects for A&W Malaysia’s business are anticipated for the second half of this year based on these growth plans, given the positive performance of recently renovated existing branches.

    A&W is a US-founded fast-food chain which is also about to make a return to Singapore after an absence of 13 years.

  • Drunken Monkey India eyes 10,000 outlets by 2025

    Drunken Monkey India eyes 10,000 outlets by 2025

    Samrat Reddy, Founder and Managing Director of Drunken Monkey grew up in Chennai where he was a frequent visitor to a local juice and smoothie shop in the neighborhood. Not an avid consumer of tea/ coffee, he gravitated towards smoothies. During his stay in Australia and UK, he observed that the sheer number of places or cafes that serve coffee is far greater than places that serve smoothies. He felt if given a chance to experience smoothies, a huge number of people would turnover and incorporate them into their lifestyle.

    Looking to fill this huge gap in the market and inspired from his own experience, he conducted some extensive research on the potential of the smoothie market and subsequently came up with a business plan to implement it. After coming back to India, with more patient groundwork and comprehensive research, hefinally started the first outlet in February 2016.

    “I wanted to do to smoothies what Starbucks did to coffee. The new generation, the millennials want to be catered to and are more willing than ever to experiment with new brands. People want a space to create meaningful social connections without restricting themselves to the regular coffee and chai outlets. Smoothies are the new social lubricant in town,” says Reddy.

    The journey has been challenging so as to build a new market for smoothies rather than feeding to an existing market of milkshakes, coffee, ice creams etc. Logistics of highly perishable products like fruits is another challenge that I faced in this journey. As a result, a scalable and sustainable business model has come out as a learning.

    “Our operating model is mostly FOFO – franchise owned and franchise operated. The training, supply or raw materials and back-end support are taken care of by the brand, the front-end operations are taken care of by the franchise. However, there is a small percentage of outlets which are COCO – company owned and company operated,” he adds.

    Drunken Monkey currently has 60 outlets in 16 Indian cities like Delhi NCR, Bengaluru, Pune, Vijayawada, Indore, Kolkata, Visakhapatnam, Chennai, Guntur, Jalandhar, Chandigarh, Surat, Thane, Vellore, and Kakinada.

    “We operate out of a cafe sit in the model (600 to 1,300 sq.ft) or a kiosk take-away model (100 to 200 sq.ft). These are located on the high-streets of the city and in malls,” says Reddy.

    What’s There To Offer?

    Drunken Monkey offers over 170 types of smoothies made from locally sourced, natural ingredients, ranging from indulgence to detox, and more. The brand uses pure natural fresh fruit, no artificial flavours, no added sugar, preservatives or concentrates.

    It ensures that the customer is spoilt for choices. There is something for every palette and every mood — from all natural fresh fruit shakes to decadently indulgent smoothies, from detox smoothies to protein smoothies, even a range of smoothies to cure hangovers!

    According to Reddy, “The Fresh Fruit smoothies and shakes are 100 percent natural, without any artificial flavors, preservatives or even ice. The functional range includes Meal Smoothies – wholesome, satisfying blends that keep you going all day, Protein Smoothies – blends of protein and fresh ingredients for a quick pick-me-up, and Hydrator Smoothies that are just perfect for summertime.”

    The brand is unfazed by the competition and believes that they do not have any direct competition in the category.

    “There are a few smoothie players, but they are restricted to limited regions. While, in India, we do not have any competition, internationally we have big players in the market such as Jamba Juice, Booster Juice.  However, the product range built by our RnD team is way ahead of any competition and it would take a lot of effort and time for any player to match it. Apart from that the market for smoothies is a hugely untapped market and the potential for growth is so immense that Drunken Monkey has a great first mover’s advantage by being the pioneers in the smoothie industry in India,” says Reddy.

    Marketing Strategy

    The marketing strategy of Drunken Monkey is aimed at doing to smoothies what Starbucks did to coffee. Four decades ago coffee was not a culture, Starbucks made it what it is now. People want a space to create meaningful social connections without restricting themselves to the regular coffee and chai outlets. Smoothies are the new social lubricant in town.

    “Our vision is to inspire people to feel beautiful, young and full of energy by living naturally high! When people discover and pursue their natural highs, they are more positively engaged, their stress levels are lower and they are able to actively help make communities better!” reveals Reddy.

    Future Plans

    Drunken Monkey is eyeing rapid expansion over the coming years. It is looking to expand to 150 smoothie bars in 2019; by 2021, spread across 5 countries with over 500 smoothie bars and by 2025 – 10,000 smoothie bars.

    Elaborating more on the expansion plans, Reddy says, “Apart from expansion, we plan to reach out to people in different ways through different distribution models. For example – we can get into supermarkets or places where people can pick up smoothies by themselves. So, eventually, we will release a few smoothies with better shelf life, where they can be kept fresh for more time. Apart from this, with fresh fruits, we can do more (apart from smoothies). So, there are more products we can give out in our outlets – expanding our portfolio without leaving our base which is fresh fruits.”

    The brand, which is eyeing Rs 115 crore revenue this fiscal, is planning to spend Rs 50 crore to aid the expansion plans.

    “We are totally self-funded; our initial capital was also self-funded. We will be looking for one round of funding after we reach 200 outlets in India, this funding will help us reach the 500 mark in quick time. Post which we will have another round of funding when we go for abroad expansion and look at expanding our product category and reach,” concludes Reddy.

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  • Indonesian ban on poultry from Malaysia has no impact on exporters

    Indonesian ban on poultry from Malaysia has no impact on exporters

    Indonesia’s ban on the import of fresh poultry and unprocessed products from Malaysia shipped after Aug 9 will not have any impact on Malaysian exporters, as they have not been in the market for more than a year now.

    According to an industry player who declined to be named, a ban on Malaysian poultry has actually been in effect since the H5N1 avian influenza outbreak early last year.

    “Basically we don’t export that much or none at all. If you remember the outbreak of H5N1 avian flu in Kelantan. Malaysian poultry or veterinary products have been banned in Indonesia since then.

    “The ban has not been lifted, so there is no effect at all and this is just a continuity of the ban,” he said, adding that the announcement could be due to unofficial movement of poultry from Sabah and came on the heels of an outbreak of avian flu there.

    Malaysia External Trade Development Corp said that Malaysia’s exports of live poultry within Asean stood at RM746.3 million in 2017 while that meat and edible offal of poultry stood at RM56.4 million.

    There are some 10 poultry-based companies listed on Bursa Malaysia. Five of them were losers at the close of trading yesterday.

    Lay Hong fell 2.07% to 71 sen on volume of 8.17 million shares, Sinmah Capital declined 1.70% to 29 sen on 12.25 million shares, CAB Cakaran Corp skidded 1.06% to 93 sen on 123,900 shares, QL Resources eased 0.33% to RM5.96 on 297,200 shares and CCK Consolidated Holdings weakened 0.55% to 90.5 sen with 292,100 shares traded.

    DBE Gurney Resources, PWF Consolidated and Teo Seng Capital were flat at 3.5 sen, 85 sen and 84 sen respectively.

    TPC Plus was the lone gainer, rising 1.35% or 0.5 sen to 37.5 sen.

    LTKM’s shares were untraded.

  • Nestle’s Q2 earnings driven by higher margin

    Nestle’s Q2 earnings driven by higher margin

    Nestle (Malaysia) Bhd’s net profit for the second quarter ended June 30 rose 2.93% to RM166.16 million from RM161.44 million a year ago due to higher margin.

    In a filing with Bursa Malaysia, the company said its gross profit margin increased by 10 basis points from 37.8% to 37.9%.

    Nestle saw a slight increase in operating expenses from RM265 million to RM271 million, which was mainly attributed to the one-time costs from the start-up of the new national distribution centre (NDC). Pre-tax profit increased from RM211.9 million to RM214.4 million.

    Revenue for the quarter rose 1.98% to RM1.31 billion from RM1.28 billion a year ago driven by the launch of new products and strong consumers and trade promotions.

    In addition, increased festive sales during the Hari Raya period in June contributed to the company’s positive growth.

    “In the second quarter, we also started operations in our new NDC. This move from the existing NDC to the new NDC resulted in a shift of sales from June (Q2) to July (Q3) because of the required and planned ramp-up of the operations in the new NDC, which will support strong growth in years to come,” it said.

    The board of directors has declared an interim dividend of 70 sen per share amounting to RM164.15 million in respect of financial year ending Dec 31 which will be paid on Sept 27.

    For the six months ended June 30, net profit rose 1.34% to RM397.38 million from RM392.13 million a year ago while revenue for the period rose 3.13% to RM2.74 billion from RM2.66 billion a year ago.

    During the period, Nestle saw higher domestic sales and an increase in its export business. It said that the domestic growth was driven by strong demand, especially during the festive seasons.

    The group continued to deliver strong innovations and renovations during the period, which have set a solid base for growth in the second half of the year.

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