Food manufacturer Monde Nissin Corp. reported a 63.9 percent drop in net income to P3 billion in the first nine months of the year due to one-off items related to the firm’s initial public offering and the Arran convertible note.

In a press briefing, the firm said unaudited core net income in January to September 2021 declined 5.3 percent versus year ago's P7.1 billion.

Consolidated revenues at end-September improved 2.2 percent while recording its strongest growth for the year in the third quarter at 4.1 percent.

Despite the four percent recovery to 39.4 percent in gross margin from the second quarter to the third quarter, core EBITDA for the third quarter declined 9.2 percent year-on-year to P4.1 billion.

Monde Nissin said this was primarily driven by higher commodity prices together with increased advertising and promotion spent for brand building.

For the third quarter alone, attributable core net income increased 8.7 percent year-on-year to P2.9 billion, aided by a lower tax rate and interest rates.

Reported net income for the third quarter increased by 1.2 percent to P2.8 billion compared with the same period last year.

“We are happy to report record quarterly revenues, led by a rebound in domestic sales. It was also good to see some recovery in margins compared with the second quarter,” Monde Nissin Chief Executive Henry Soesanto said.

The firm’s Asia-Pacific Branded Food and Beverage Business (APAC BFB) sales in the third quarter recorded the strongest growth this year at 4.2 percent to P14.1 billion.

This was mainly driven by the domestic business which grew 4.4 percent to P13.2 billionn, led by robust growth in noodles and a stabilization in biscuits.

Revenue growth in the international business tapered last quarter to 1.2 percent compared with a high base in the third quarter of 2020 amidst ongoing logistical challenges including shipping container and vessel shortage, and port congestion, ending at P892 million.

The resulting APAC BFB sales in the first nine months grew by 2.6 percent to P40.3 billion.

Net sales in the meat alternative business (Quorn Foods) declined 3.8 percent in the third quarter on an organic basis versus 2020, reflecting the challenging U.K. macro conditions, in particular unprecedented labor shortages in all areas of retail and distribution.

However, a favorable foreign exchange variance resulted in a 3.6 percent increase in Philippine peso terms to P3.6 billion.

While retail sales, particularly the frozen segment, remain challenged, there was significant growth in foodservice with third quarter revenue up 63.8 percent versus a year ago.

Revenues in the first nine months were P11.1 billion, a decline of 3.6 percent on an organic basis versus same period last year.

“We continue to progress on our capacity expansion initiatives with our first noodle line in our newly constructed plant in Southern Luzon, which became operational in September and now is awaiting regulatory approvals to begin shipping products; and we commissioned our fourth fermenter for our Meat alternative business in July,” said Soesanto.

He added that, “We remain on-track with our 2022 capacity expansion plans including additional healthy noodles lines and the completion of our fourth harvester for Quorn Foods.”