MANILA, Philippines — Snacks food giant Monde Nissin Corp. reported a net loss of P13 billion last year, mainly due to an impairment of intangible assets.
In a disclosure to the Philippine Stock Exchange, Monde Nissin said the net loss was mainly due to a non-cash, non-operating impairment of the intangible assets of Marlow Foods, which owns Quorn and Cauldron.
“The impairment was caused by the application of a higher discount rate due to the prevailing higher interest rates and risk premiums, some margin compression, and rationalization of the trend in the meat alternative category,” the company said, adding that this impairment does not have any effect on the day-to-day operations of Quorn, Cauldron, or any of Monde Nissin’s Asia-Pacific Branded Food and Beverage (APAC BFB).
The non-recurring net loss of P19.6 billion for the year consisted mainly of impairment and restructuring costs for its meat alternative business, partially offset by the derivative gains from the unwinding of the cross-currency swap.
“Booking the impairment provision, while prudent, is a frustrating set back, driven mainly by increases in global interest rates and risk premiums. However, these are not the only causes of our impairment provision which also reflects recent margin compression associated with our price increases lagging cost inflation, some reduction in sentiment toward the meat alternative category; and costs associated with our recent focus in the US market where we are currently undertaking a restructuring,” Monde Nissin CEO Henry Soesanto said.
“We continue to believe in the long-term growth potential for sustainably produced and clean label alternative proteins. We are the world’s largest producer of mycoprotein which fits all these attributes and is a key differentiator for us. During this current category slowdown, we are seeing consumers gravitate towards quality, as demonstrated by a growth of over 50 percent in our foodservice business and recovering market share in the UK,” he said.
Monde Nissin reported that its core gross profit for the year declined by 9.6 percent to P23.1 billion in 2022.
It explained that raw material and energy costs were elevated partly due to the impact of delayed depletion of commodity lock-ins entered earlier in the year due to the temporary decline in sales of noodles in the third quarter, and were only partially mitigated by price increases.