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Nestle reports pressure on profits from price-wary shoppers

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(Globalpost/GlobalPost)

Swiss food giant Nestle suffered from weak consumer confidence in developed countries in the first six months of the year and from slowing growth in emerging economies it said on Thursday.

Net profit rose by 3.7 percent to 5.1 billion Swiss francs (4.1 billion euros $5.47 billion) in the first half of the year compared to the outcome 12 months ago, the group said.

Nestle, which is the biggest food processor in the world, said that current operating profit rose by 6.8 percent to 6.8 billion Swiss francs and that sales rose by 5.3 percent to 45.2 billion Swiss francs.

Analysts polled by AWP agency had broadly expected a net profit of 5.1 billion Swiss francs from sales totalling 45.5 billion Swiss francs.

Internal growth of the business was 4.1 percent from 6.6 percent in the equivalent period last year.

Managing director Paul Bulcke said that the outcome for internal growth had slipped back slightly. This was because the group had passed on a fall in raw materials costs to customers who were increasingly attentive to prices.

The group adjusted its outlook for this year downwards looking now towards internal growth of 5.0 percent instead of 5.0-6.0 percent previously.

However, it expected its margins and recurrent profit per share to improve on a basis of constant exchange rates.

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http://www.globalpost.com/dispatch/news/afp/130808/nestle-reports-pressure-profits-price-wary-shoppers