Monde Nissin Corporation announced that preliminary figures for the fourth quarter will translate to single-digit growth in revenues even though its meat alternative business continues to be a drag.
In a disclosure to the Philippine Stock Exchange, Monde Nissin said expectations are based on preliminary unaudited financial results for the fourth quarter of fiscal year 2023, ended December 31, 2023. All figures approximate due to the preliminary nature of the announcement.\
“I am pleased to share that our preliminary fourth quarter results reflect the continued strength that we saw during the third quarter driven by our APAC BFB business. This led to another all-time high revenue for the quarter and for the year,” said Monde Nissin Chief Executive Officer Henry Soesanto.
The firm said its Asia Pacific Branded Food and Beverages business saw strong topline growth both year-over-year and sequentially during the fourth quarter, aided by growth across all major categories, particularly a robust growth in noodles and beverages.
“Our noodles market share improved by 140 bps to 67.3 percent and 380 bps to 67.5 percent for the past 52-week and 12-week periods as of December 2023, respectively,” Monde Nissin said.
It added that, “The fourth quarter sales growth in the domestic business was backed by all-time high volumes, which grew by more than 5 percent year-on-year and 2 percent sequentially.”
“We saw continued margin expansion of over 400 bps year-over-year in the fourth quarter. Our commodity lock-ins for wheat and palm oil until the second quarter and third quarter of 2024, respectively, are lower by a low double-digit percentage compared to the same period last year,” the firm noted.
However, Monde Nissin said “Our Meat Alternative business continues to navigate in a challenging environment as we expect a single digit decline for the fourth quarter.”
While the UK retail market has remained weak and continues to affect the topline, the firm anticipates being at least EBITDA neutral in the fourth quarter.
“The annual impairment test in our meat alternative business is ongoing; however, we also believe the family’s financial support will largely cover any potential impairment at the parent level,” it said.
For the full year, the company expects a high single-digit year-on-year sales growth on a comparable basis and gross margin to be in-line with 2022 margin as gross margin expansion in APAC BFB was offset by the decline in Meat Alternative gross margin in 2023.
“In addition, we expect core net income to grow by mid-teens for the full year 2023. Meanwhile, core net margin in the fourth quarter grew by more than 500 bps compared to the same period last year,” the firm said.