The UK meat alternative business continues to erode the earnings of food and beverage giant Monde Nissin Corporation, although Quorn’s losses and the principal shareholders’ guarantee have further exacerbated the situation, rather than easing the burden.

In a disclosure to the Philippine Stock Exchange, the Group reported a 21.5 percent decrease in net income to ₱2.74 billion in the first quarter of 2025, even though consolidated net sales increased by 2.8 percent to ₱20.88 billion during the period under review.

Sales were driven by continued growth in the Asia-Pacific Food and Beverage (APAC BFB) category from biscuits, packaged cakes, and culinary, partly offset by a slight decline in noodles and continued category challenges affecting the meat alternative business.

Aside from challenges to the meat alternative business, the group recorded a loss on fair value on guaranty assets amounting to ₱290 million in the first quarter of 2025 from a gain of ₱324 million in the first quarter of 2024.

The fair value loss was due to the adverse impact of fluctuations in the Monde stock price and volatility, about the Monde Nissin Singapore Pte Ltd. (MNSPL) guaranty asset.

Through MNSPL, Monde’s principal shareolders pledged a portion of their stake in the company to significantly reduce the net cumulative impairment from the meat alternative business, if any, starting with the calendar year ending December 31, 2023 and every year thereafter up to calendar year ending December 31, 2032 with settlement (if any) occurring on a one-time basis on or before June 30, 2033.

The cash settlement by the controlling family shareholders will be capped by the value of up to approximately 12 percent of outstanding shares (meaning 2.156 billion shares) of Monde Nissin based on the weighted average stock price for the last five trading days of calendar year 2032.

“This financial support by myself and the family shareholders comes after listening to and reflecting on the concerns that some of our shareholders have expressed about the current challenges in the meat alternative category, which are impacting our business in the United Kingdom,” said Monde Nissin Chief Executive Henry Soesanto.

Monde Nissin’s APAC BFB net sales increased by 4.1 percent to ₱17.58 billion in the first quarter of 2025. The domestic business (which accounts for 94 percent of total APAC BFB business) grew by 4.3 percent in the first quarter of the year, driven by solid volume growth in biscuits, packaged cakes, and culinary.

The slight decline in the noodles segment partly impacted the total domestic business internal sales growth.

Meanwhile, international business (which accounts for six percent of total APAC BFB business) increased by 2.4 percent primarily due to good growth in noodles despite lower sales biscuits business in North America market.

North America business was partly affected by replenishment timing in the fourth quarter of 2024 and uncertainty related to recent economic and geopolitical developments in the U.S. in the first quarter of 2025.

Net sales in the Meat Alternative segment decreased by 3.8 percent on a reported basis and decreased by 5.8 percent on a constant currency basis to ₱3.3 billion in the first quarter of 2025 because of continued category challenges, particularly in the UK market.

Sales in the UK market were down while sales in the US and rest of the world had increased versus prior year.