Monde Nissin Corp. on Thursday said its core income at ownership fell 13 percent to P4.25 billion in the first semester, from last year’s P4.88 billion, as margins contracted due to unfavorable sales mix and higher commodity input costs.
Unaudited reported net income for the period declined to P204 million, which primarily includes non-core and non-recurring items, such as price difference and interest on redemption of the Arran convertible notes at its initial public offering price (IPO) of P13.50 per share, IPO-related expenses and deferred tax liability adjustments reflecting revised corporate tax rules in the United Kingdom.
Its sales for the period were flat at P33.75 billion, with revenues in the Philippines falling by 1 percent to P24.37 billion, but the company recorded gains in its operations in other parts of the world.
“We undertook some price increases in June to partly recover rising commodity input costs and continue to implement supply chain cost savings. We have achieved significant progress on several long-term growth initiatives, laying the foundation for growth in both our APAC BFB [Asia Pacific branded food and beverage] and meat alternative businesses,” Henry Soesanto, Monde Nissin’s CEO, said.
Soesanto said the price increases it made in the Philippines last June should partly alleviate the pressure on gross margins.
“But we must be mindful of the difficult circumstances our consumers are currently going through. The recently announced stringent quarantine in the National Capital Region and some other parts of the country will be difficult for many,” he said.
He said the company may record a mid-single digit revenue growth for the year, but its income will still be down for the entire 2021.
For the first half, sales of Asia Pacific, a huge chunk of which is from the Philippines, were flat at P26.24 billion, as the growth in noodles was offset by the decline in biscuits.
Sales of meat alternative, such as Quorn and Cauldron products, fell by 0.6 percent to P7.52 billion reflecting softness across the retail markets of the UK and the United States. Retail sales were adversely affected by the relaxation of Covid restrictions, which resulted in greater out-of-home consumption in the second quarter.
“Monde Nissin being a consumer-focused company, my main priority is to continue to earn their long-term support and trust through fair treatment and good value products. For Quorn Foods, I fully hope to see a much faster growth in the second half of the year,” Soesanto said.