Geneva: Swiss-based food giant Nestle has reported an 18.7% rise in half year net profits to 4.92 billion Swiss francs ($4.08 billion) prompting it to raise its growth target for the full year.
Nestle said in a statement that sales had increased by 8.4% in the first six months of the year to 51.11 billion Swiss francs.
Operating earnings before interest and tax (EBIT) grew 14.2% to 6.92 billion Swiss francs, it added.
Organic growth — a measure of business performance that excludes financial investments or acquisitions — reached 7.4%, above Nestle’s target of about 5-6% for the year.
“The Group again achieved both strong growth and improved margins, the hallmark of the Nestle model,” said chief executive Peter Brabeck.
“In spite of increasing input cost pressures, I am confident of Nestli achieving above-target organic growth for 2007, as well as a sustainable margin improvement,” he added.
Nestle is expecting continued increases in the price of raw materials, especially milk.
Growth in the group’s core food and softdrinks business was strongest in Asia an Africa (9.7%), followed by North and South America (7.4%) which traditionally account for the largest single slice of Nestle’s business.
Organic growth in Europe, especially the west, continued to lag behind, with an increase of 1.4% to 13.6 billion Swiss francs.
Nestle’s board has agreed to a new 25 billion Swiss franc share buyback scheme over three year, the company said.