Nestlé profits beat analyst forecasts

Nestlé's profits leap Keystone

The world's largest food group, Nestlé, has posted net profit growth of 35 per cent for the first six months of the year to SFr2.8 billion ($1.6 billion), up from SFr2.1 billion for the same period in 1999.

Trading profit at the canton Vaud-based multinational rose 23 per cent to SFr4.3 billion on sales of SFr39 billion, up from SFr35 billion. All the figures beat the consensus analyst forecast for the group.

In a statement, Nestlé said the strong sales performance reflected the group’s emphasis on internal growth. It attributed profit growth to improved efficiency, the streamlining of the group’s product portfolio, industrial restructuring and some lower raw material prices, which were able to offset higher packaging costs.

It said all regions and activities contributed to real internal growth, which stood at 4.5 percent for the first half of 2000. The improvement was particularly noticeable in food sales in Asia, Oceania and Africa, as well as in Latin America, with the exception of Brazil, and Eastern Europe.

North America and Western Europe showed moderate sales growth, with bottled water and pharmaceuticals performing well.

The company also said it expects further improvements in sales and profits in the second half, but warned that growth would slow. However, it said it was confident sales and profits would exceed those in 1999.

swissinfo with agencies