Malaysia Morning Wrap | Nestlé Malaysia Reports Significant Drop in Q3 Profits Due to Sluggish Domestic Sales

The market climbed on Thursday. The S&P 500 and Nasdaq gained on healthcare and tech while consumer, tech, and infrastructure pulled down the Dow. Just past 4 pm ET, the $S&P 500 Index (.SPX.US)$ traded +0.21%, the $Dow Jones Industrial Average (.DJI.US)$ fell 0.34%, and the $Nasdaq Composite Index (.IXIC.US)$ climbed 0.46%.

$NESTLE (4707.MY)$ net profit dropped dramatically by 36.12% to RM85.41 million in the third quarter ending September 30, 2024 (3QFY2024), down from RM133.7 million the previous year, primarily due to a decline in domestic sales. This marks the second consecutive quarter of significant profit decline, with a net profit of RM93.6 million in 2QFY2024, a 48.27% decrease year-on-year. The group cited consumer hesitancy and affordability issues as factors affecting sales. Revenue also fell by 18.4% to RM1.45 billion. The company declared a second interim dividend of 35 sen per share, a reduction from the previous year's 70 sen.

$VITROX (0097.MY)$ reported a 32.5% decrease in net profit to RM22.45 million for 3QFY2024, affected by a weak US dollar and resulting foreign exchange losses. The company's revenue slightly decreased by 2.2% to RM146.7 million, attributed to slow market recovery and reduced demand for its automated board inspection services. No dividends were declared for this quarter.

In a recent judicial decision in Singapore, two principal shareholders of $REXIT (0106.MY)$, Datuk Seow Gim Shen and Kong Chien Hoi, received jail sentences for their involvement in a scheme to illicitly acquire personal data of over 9,000 individuals. The Straits Times reported that both pleaded guilty to conspiring with Sun Jiao, a Chinese national, to obtain personal information of 9,369 people for use in gambling operations. Sun is purportedly connected to a global cybercrime syndicate. Each of the shareholders was sentenced to 14 weeks in prison.

$PAVREIT (5212.MY)$ experienced an 8.65% increase in net property income, reaching RM131.86 million for 3QFY2024, up from RM121.35 million a year earlier, due to decreased property operating costs and reversal of doubtful debts. Revenue rose by 4% to RM207.26 million, driven by higher rental and event income at Pavilion Bukit Jalil. The distribution per unit was raised to 2.38 sen, up from 2.15 sen last year.

$CLMT (5180.MY)$ reported a 6.3% increase in net property income to RM61.99 million for 3QFY2024, supported by positive performance at its key properties. Revenue grew by 5.4% to RM109.24 million, with enhanced rental agreements and higher occupancy rates contributing to the increase. The REIT declared a distribution of 1.07 sen per unit, reflecting an improvement from the previous year's 1.05 sen.

$DXN (5318.MY)$ recorded a 13.2% decrease in net profit to RM65.97 million for the second quarter ended August 31, 2024 (2QFY2025), impacted by foreign exchange losses and rising employee and shipping costs. Despite these challenges, revenue grew by 6.6% to RM488.43 million, attributed to strong sales performance in Peru and Bolivia. The company announced a dividend of 0.8 sen per share, a decrease from the previous year's 0.9 sen.

$LUXCHEM (5143.MY)$ net profit fell by over 26% to RM6.67 million in 3QFY2024, primarily due to increased administrative costs. However, revenue increased by 18.29% to RM196.09 million, bolstered by growth in both trading and manufacturing sectors. No dividend was declared for this quarter.

$AWC (7579.MY)$, through its subsidiary Ambang Wira Facilities Sdn Bhd, has secured a RM9.4 million contract from the Melaka Public Works Department to manage and maintain the immigration, custom, quarantine, and security complex in Sungai Melaka. The contract spans 60 months, starting from November 1, 2024, to October 31, 2029.

$SCBUILD (0109.MY)$ has announced the mutual termination of a RM4.3 million contract with Merchant Esteem Sdn Bhd (MESB) for the construction of affordable homes equipped with solar-powered roofs. The termination was influenced by a strategic shift under MESB’s new management, citing prevailing uncertainties in the commercial property market and a decrease in demand which could affect the construction and sales of shophouses. Currently, the project is 20% complete, and no payments are pending to SC Estate Builder from MESB. The company has stated that this termination is unlikely to materially affect its earnings and net assets for the financial year ending July 31, 2025.