Monde Nissin Corporation reported a 21 percent drop in attributable core net income to P5.6 billion in the first nine months of 2022 due to increased logistical costs, investments in organizational resources, and investments.

In a statement, the firm said its attributable core net income fell by a steeper 46 percent in the third quarter of 2022 to P1.55 billion.

Consolidated revenue for the first nine months inched up 6.7 percent to P54.9 billion as net sales in the third quarter was soft and up by only 0.2 percent at P17.7 billion.

Core gross profit for the first nine months declined by 7.1 percent to P18.2 billion compared to same period last year.

Core gross margin for the first nine months declined by 490 bps year-on-year to 33.2 percent due to elevated raw material and energy costs partly due to the impact of commodity lock-ins entered earlier in the year, partially mitigated by fair price increases.

Reported net income grew 141.8 percent to P5.6 billion due to a low base in 2021 given expenses related to the Arran convertible note, deferred tax liability adjustment in the UK, and IPO-related expenses.

Non-recurring items this year were mainly due to derivative gains from the unwinding of cross-currency swap, offset by non-recurring expenses such as a change in the estimated useful life of Quorn PPE, restructuring costs in the UK, impairment of asset in APAC BFB, as well as expenses related to global strategic alignment initiatives, resulting in a non-recurring net loss of P10.0 million.

“Despite continued strong revenue growth for biscuits and other categories, our Q3 noodle sales have been affected by July’s selective recall in the EU, and this translated into flat overall revenues for the third quarter,” said Monde Nissin Chief Executive Offier Henry Soesanto.

He noted that, “For Meat Alternatives, our business saw 7.1 percent growth in revenue at constant currency and increased market share in a very difficult retail environment, while foodservice continued its strong momentum.”

“However, we realize that market conditions today are very challenging and there is a need to adjust to the current realities despite our view on the longer-term attractiveness of the category. As such, we are implementing a number of restructuring and efficiency measures,” he added.

Asia-Pacific Branded Food and Beverage (APAC BFB) net sales for the first nine months increased by 8.3 percent to P43.7 billion, mainly driven by price increases in all categories and volume growth in biscuits and other categories.

The domestic business grew 9.2 percent year-on-year to P41.0 billion for the first nine months; while it declined by 0.7 percent year-on-year to P13.1 billion in the third quarter as the strong growth in biscuits and other categories was offset by the temporary decline in noodles.

International revenue declined by 4.1 percent to P2.6 billion for the first nine months, while it decreased by 2.5 percent year-on-year in the third quarter to P0.9 billion due to a temporary slowdown as measures to ensure global compliance were strengthened.

Meat Alternative revenue increased on a constant currency basis by 1.0 percent for the first nine months and by 7.1 percent in the third quarter due to price increases, strong volume growth in foodservice, and share recovery in the UK retail business.

On a reported basis, revenue for the first nine months increased by 0.8 percent to P11.2 billion, and by 4.2 percent to P3.8 billion in the third quarter compared to the same period last year.