Today let's have a look at the latest financial report of NESTLE which was released few days ago.
At the first look,
I don't feel anything when there was a 1.3% dropped in revenue.
HOWEVER,
I was shocked that the profit decreased so much:
We can see that the rising Cost of sales and Operating expenses were the two main factors causing the profit to be reduced.
The local sales dropped by 3.4%,
but the export sales increased by 8.8% which surprised me:
The local sales dropped because of earlier timing of Chinese New Year,
and the Out of Home Business which a lot of restaurants, coffee shops, mamaks all closed during MCO period.
The management also mentioned that in order to protect the safety of employees,
more PPE were bought and causing the Operational expenses to rise:
The company also contributed to some relief efforts and caused the expense to increase,
and the effect of relief efforts will continue until the next quarter.
I became more aware after reading this.
Currently,
there are some super high PE companies in the shares market,
because everyone expected that those companies will achieve super high profit due to COVID-19 outbreak.
HOWEVER,
will those companies also contributing to a lot of relief efforts,
for example kept donating its own products,
and caused the profit to be lower than everyone expecting?
Of course,
this is just my speculation based on imagination.
Together with the profit dropped,
the management also released some good news.
The CAPEX investment will be the highest since last 6 years,
around RM280 million.
It will be used to expand the capacity of MAGGI noodle production,
and also a latest production line in Shah Alam in preparation for entry into a new high growth category with great future potential:
That's all for the important points of latest financial report,
if you feel like something is lacking,
feel free to go to BURSA website to download and read it.
NESTLE products always getting a lot of loves from Malaysian people,
as the shareholder,
we always feel happy when seeing that people buying NESTLE products while shopping at supermarket.
HOWEVER,
being one of the most popular F&B company in Malaysia,
it also must bear with the social commitment and contribute in relief efforts,
which caused the expenses to rise.
Together with the impact of COVID-19 outbreak and causing the operating cost to be rising,
as the shareholder,
we will worry too.
Investing at NESTLE now will make us happy and worry the same time,
so it depends on your own decision to invest at it or not.
Investment is always about doing own thinking, making own decision.
Thanks for reading.
I don't provide any buying/selling suggestion above,
please make your own investment decision and be responsible with it.
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