Nestle (OTCPK:NSRGY) reported its slowest first-half sales growth since 2009, with revenue increasing 3.5% on an organic basis, as the world’s largest food company struggled to raise prices. Further, the company confirmed its fiscal 2016 earnings guidance.
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In the first half sales volumes increased by 2.8 percent and rose just 2.7 percent in the second quarter, down from 3 percent in the first quarter. “While we continued to address challenges in China, we enjoyed good performances across the US, Europe, South East Asia and Latin America and expect this to continue in the second half.Overall our first half performance allows us to reconfirm our outlook for the full year”.
GENEVA (AP) – Swiss food and beverage giant Nestle says first-half profit dipped due to a one-time tax expense even as revenues edged up behind growth in its key North American food business and despite a slowdown in the Chinese market.
Underlying earnings per share went up 5.7 percent in constant currencies. Net profit fell to CHF4.29bn from CHF4.74bn a year ago. Nestle announced in May plans to improve the margin by 2 percentage points from 2019 through cost savings.
Asked whether Nestle would increase its dividend this year, Roger only said Nestle had done so in the past despite the strong Swiss franc.
The maker of Kitkat chocolate bars and Maggi noodles reaffirmed its full-year forecast after “organic” sales growth, adjusted for acquisitions, divestitures and currency swings, slowed to 3.5 percent in the first half of 2016, below the average estimate of 3.8 percent given in a Reuters poll of analysts.
Pricing has reached a historically low level due to deflationary environments across a number of developed markets and low commodity prices, the company said.
Nestle was trading slightly up Thursday (0.96 percent) at 79.10 Swiss francs per share, while Switzerland’s main SMI index was up 0.34 percent.
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In Zurich, Nestle shares are now trading at 78.15 francs, down 0.26 percent.
