Food manufacturer Monde Nissin Corporation reported that its unaudited net income fell 60.5 percent to P3.2 billion in 2021 primarily due to one-off items related to its Arran convertible note and initial public offering.
In a disclosure to the Philippine Stock Exchange, the firm said attributable core net income was cushioned by a lower effective tax rate, resulting in a softer decline of 5.4 percent to P8.2 billion.
Consolidated revenue for the year ended at P69.3 billion, increasing 2.0 percent on the strong performance in 2020. This reflects positive quarterly growth throughout the year, with fourth quarter revenues growing 1.4 percent to a new high of P17.8 billion.
Core EBITDA decreased by 15.2 percent to P13.2 billion, due to the continuing high-inflation environment and brand-building activities through advertising and promotion.
Monde Nissin Chief Executive Henry Soesanto said “we were able to grow our revenue despite a challenging operating and economic environment that included inflationary cost pressures and supply chain disruptions.”
The firm’s Asia-Pacific Branded Food and Beverage (APAC BFB) net sales increased 2.1 percent to P54.0 billion for 2021 as the international business grew 21.5 percent to P3.7 billion despite continued shipping challenges.
Meanwhile, the domestic business posted 1.0 percent growth to P50.4 billion on sustained volumes for noodles and recovery in the biscuits segment in the fourth quarter with 3.2 percent growth.
Due to continuing commodity cost pressures, gross profit declined by 6.5 percent for the full year to P19.6 billion. Gross margin decreased by 3.3 percent to 36.2 percent, mitigated by price increases taken in the second half of 2021.
Core EBITDA declined by 11.7 percent to P11.7 billion due to normalization of advertising and promotion support to sustain the growth experienced during the pandemic.
Meat Alternative (Quorn Foods) saw a reduction in the U.K. and U.S., following exceptional growth in 2020, and challenging macroeconomic conditions in the U.K., including labor shortages, resulted in revenue declining 3.9 percent year-to-date on an organic basis versus prior year on stable market share in the UK.
Favorable foreign exchange variance reverses this to a 1.4 percent increase in Philippine Peso terms to P15.2 billion.
There continues to be softened sales in the retail segment, particularly in frozen. Meanwhile, foodservice growth in the fourth quarter was the strongest for a quarter, surging 69 percent.
Price increases taken in the U.S. and U.K. in late 2020 and early 2021, respectively, resulted in full year gross profit increasing by 8.1 percent to P6.0 billion.
Core EBITDA declined by 35.6 percent to P1.5 billion in the full year due to investments in research and development as well as advertising and promotions.
“All the work initiated in 2021 has set us up for growth in 2022. We will continue to innovate for upcoming product launches, improve distribution in key channels, and market to drive more consumption moments for our products,” Soesanto said.
He added that, “While we had a strong start to the year, the central challenge for us is how we deal with the global wall of commodity inflation. There is only so much that can be done through supply chain efficiencies, after which there is a mathematical inevitability that we will need to pass on cost increases to our consumers.”
“However, as I have commented before, we are always mindful that our consumers are also hurting due to current inflationary pressures. While further price increases from us seem probable, we are mitigating these by having hedged a significant proportion of our input costs,” Soesanto noted.
He pointed out that, “due to the current geopolitical situation in Ukraine, we have taken steps in mitigating potential supply chain disruptions by reviewing our key raw materials and ensuring we maintain higher buffer levels. We will continue to review and take necessary measures as the situation evolves.”