VEVEY (dpa-AFX) - Swiss food major Nestlé (NSRGY.PK, NSTR.L) reported that its net profit for the first-half of 2020 rose 18.3% to 5.9 billion Swiss francs from the previous year. Earnings per share increased 22.2% year-over-year to 2.06 francs on a reported basis. Net profit margin increased by 340 basis points to 14.3%, benefiting from one-off income related to divestitures and improved operating performance.
Underlying earnings per share increased by 0.5% in constant currency, and decreased by 5.9% on a reported basis to 2.01 francs. Divestitures and lower contributions from associates and joint ventures had a negative impact of 4.4%. Nestlé's share buyback program contributed 1.4% to the underlying earnings per share increase, net of finance costs.
Divestitures and foreign exchange reduced sales by 12.3%. Total reported sales decreased by 9.5% to 41.2 billion francs from the prior year.
For 2020, the company expects organic sales growth between 2% and 3%. The underlying trading operating profit margin is expected to improve. Underlying earnings per share in constant currency and capital efficiency are expected to increase. The guidance is based on current knowledge of COVID-19 developments and assumes no material deterioration versus present conditions.
The company said that its portfolio management is fully on track. It is exploring strategic options, including a potential sale, for parts of the Waters business in North America and the Yinlu peanut milk and canned rice porridge businesses in China. It also completed the sale of a 60% stake in the Herta charcuterie business to Casa Tarradellas.
Copyright RTT News/dpa-AFX