Monde Nissin’s 9-mo core profit dipped 3.5%
Higher prices of edible oil continued to take a bite out of the core profit of food manufacturing giant Monde Nissin Corp., with its first nine months earnings showing a 3.5-percent decline.
The company said on Wednesday that its core net income attributable to shareholders had dipped to P7.19 billion this year from P7.45 billion last year.
Production costs during the period rose 6 percent to P42.23 billion from last year’s P39.79 billion.
For coconut oil alone, prices surged by 109 percent year-on-year in the third quarter.
The firm’s Asia-Pacific branded food and beverage (APAC BFB), however, booked higher revenues reaching P53.3 billion, up 4.4 percent from a year ago. For the third quarter, the segment saw a 4-percent growth.
Gross profit also dipped by 3.4 percent to P18.5 billion. Amid the recent increases in edible oil costs, profit margins narrowed by 279 basis points (bps) year-on-year to 34.8 percent in the January to September period.
The segment’s popular food brands include Lucky Me!, SkyFlakes, Fita and M.Y. San Grahams.
“Our APAC BFB business delivered modest topline growth in the third quarter, supported by volume growth in biscuits and other categories. Our strong start to October, with record domestic sales, is encouraging; however, we remain cautious given the uncertainties ahead in the fourth quarter,” CEO Henry Soesanto said in a press briefing.
Jesse Teo, Monde Nissin chief finance officer, said the group is launching aggressive programs amid a decline in its market share.
“For noodles, competition has intensified. We try to regain volume sales … We saw appreciation of shares for premium imported products that ate away some of our shares in noodles,” Teo said.
Revenues from the meat alternative business, on the other hand, decreased by 1.2 percent amid “challenging conditions.”
“We will continue to focus on driving efficiency and supporting a gradual recovery as we navigate the current market environment,” Soesanto said.
Soesanto was optimistic about Monde Nissin’s performance in the coming quarter.
“While higher edible oil costs continue to put pressure on our gross margins, we are beginning to see the benefits of our pricing adjustments and cost-saving initiatives, such as reformulation,” he added.
