Monde Nissin reports weaker earnings

By JAMES A. LOYOLA

Food manufacturer Monde Nissin Corporation reported a 17.9 percent drop in net income to P3.5 billion for the first half of 2023 as the restructuring costs in its meat alternative business weighed on its profitability.

In a disclosure to the Philippine Stock Exchange, the firm said attributable core net income for the first half declined by 14.1 percent to P3.5 billion from P4.08 billion.

Monde Nissin said this reflects the decline in gross profit particularly in its meat alternative business, increased marketing expenses in the Asia-Pacific Branded Food and Beverage (APAC BFB) business, and foreign exchange loss. 

Consolidated revenue for the first half grew 7.0 percent to P39.2 billion as second quarter growth tapered to 3.2 percent.

APAC BFB net sales for the first half increased by 10.0 percent to P32.1 billion. The domestic business grew 9.3 percent year-on-year to P30.0 billion in the first half due to the moderated growth in the second quarter at 3.7 percent, reflecting the continued growth in biscuits and other categories offset by the softening demand for noodles. 

International revenue increased by 20.8 percent to P2.1 billion for the first half due to the robust growth in biscuits.

Meat Alternative revenue declined on a constant currency basis by 6.6 percent in the first half and 8.8 percent in the second quarter due to the continued category headwinds. 

On a reported basis, revenue for the first half declined by 5.0 percent to P7.1 billion. UK declined by 5.5 percent on a constant currency basis in the first half due to the challenging retail market. 

The foodservice business grew 11.3 percent in the second quarter, bringing the first half growth to 7.9 percent.

Core gross profit for the first half declined by 34.1 percent to P1.8 billion, while the core gross margin declined by 1,130 bps to 25.5 percent due to the dilutive effect of price increases versus inflation, lower volume, and higher overhead costs.