Food and beverage manufacturer Monde Nissin Corporation reported a 13.8 percent drop in net income to P1.99 billion in the third quarter of the year, primarily due to non-core items related to its meat alternative business which reduced earnings by P359 million.
In its disclosure to the Philippine Stock Exchange (PSE), the firm said profits for the first nine months of the year improved five percent to P6.09 billion despite a reduction of P1.37 billion due to non-core items.
These non-core items refer to an impairment loss and restructuring costs in the firm’s Meat Alternative business, and a foreign exchange loss, partially offset by a non-cash accounting gain of P495 million on the fair value of the Meat Alternative guaranty asset.
Consolidated revenue for the third quarter of 2024 inched up 3.4 percent to P21.01 billion, while January to September sales eked out a 3.2 percent gain to P61.15 billion.
Core attributable net income for the first nine months increased by 31 percent to P7.5 billion due to record core net income in the Asia-Pacific branded food and beverage (APAC BFB) business of P8.1 billion.
Core attributable net income in the third quarter increased by 7.7 percent to P2.4 billion; the growth rate dropped compared to the core EBITDA growth rate of 14 percent due to foreign exchange losses.
APAC BFB net sales for the first nine months grew by 4.3 percent to P51.1 billion and rose by 5.1 percent in the third quarter, largely driven by volume growth in biscuits and other categories.
Monde Nissin’s Meat Alternative (Quorn Foods) reported that revenues declined by 6.5 percent and 9.1 percent on a comparable and constant currency basis in the first nine months and third quarter, respectively, as category softness continues.
“The APAC BFB business saw solid topline growth year-on-year in the third quarter, supported by volume growth in biscuits and other categories. Our APAC BFB gross margin improved year-over-year, and we expect this to continue in the fourth quarter,” said Monde Nissin Chief Executive Henry Soesanto.
He added, “we expect better year-on-year and sequential topline growth in the fourth quarter, aided by improved supply. We are off to a good start in October for our domestic business with high single-digit growth and our first month achieving P6 billion in domestic revenues. Moreover, we have new initiatives such as the launching of new categories.”
Regarding Quorn, Soesanto said, “given the continued challenges in the Meat Alternative business, we plan to streamline costs and simplify operations through a restructuring and business transformation that will affect all parts of the organization.”
“Alongside this, Marco Bertacca has decided to step down as the CEO of Quorn Foods as he believes that the next phase of the business will benefit from new ideas and renewed energy. I thank him for his hard work during a very difficult time, including the COVID pandemic,” he said.
Soesanto added, “Marco will be succeeded by David Flochel, who has successfully led the transformation of several food and beverage businesses. David has recently joined us and will take over responsibility as CEO in January.”
“We are targeting our Meat Alternative business to be EBITDA positive in 2025 with total cash savings of GBP 8 million in 2024 and 2025, and we expect recurring annual cash savings of GBP 8 million," he noted.
“The cash cost to implement this will be approximately GBP 8 million in 2024 and 2025, which will be partially funded from the restructuring savings. We believe these actions will put the business on a stronger footing and better set up for future success,” Soesanto also said.