Monde Nissin completes restructure of meat alternative business

MANILA, Philippines — Snack food giant Monde Nissin Corp. has completed the restructuring of its meat alternative business, cautiously optimistic of the growth of this business segment in the coming quarters.

“The previously announced restructuring of our meat alternative business has been substantially completed and we are on track to deliver previously guided savings. Despite the continued category challenges, EBITDA improved during the second quarter and we are cautiously optimistic that this will continue in the coming quarters,” said Monde Nissin CEO Henry Soesanto.

In the first half of the year,the company raked in consolidated revenue of P39.2 billion, up by seven percent.

However, core gross profit during the period declined by 2.2 percent to P12 billion while second quarter core gross profit declined by 2.6 percent.

Core net income attributable to shareholders for the first half likewise declined by 14.1 percent to P3.5 billion, reflecting the decline in gross profit particularly in the meat alternative business, increased marketing expenses in the Asia Pacific Branded Food and Beverage (APAC BFB) business and foreign exchange loss.

In terms of business segments, revenue from the meat alternative business declined by 6.6 percent in the first half and 8.8 percent in the second quarter due to the continued category headwinds.

On a comparable basis, APAC BFB net sales for the first half increased by 10 percent to P32.1 billion. The domestic business grew by 9.3 percent year-on-year to P30 billion in the first half due to the moderate growth in the second quarter at 3.7 percent.

While there was continued growth in biscuits and other categories, this was offset by the softening demand for noodles.

International revenue, on the other hand, increased by 20.8 percent to P2.1 billion in the first half due to the robust growth in biscuits.

“The APAC BFB business saw topline growth moderate during the second quarter as volume growth slowed down in all categories, most noticeably in noodles. This reflects what we have observed over the past few months and what appears to be an overall macro trend of more modest consumption across many food and beverage categories. However, despite this slowdown, we saw good improvement in our gross margin compared to the previous quarter, as well as year-over-year which we expect will continue as the year progresses. Looking ahead, we expect the third quarter to show better year-on-year growth, being helped by last year’s lower base,” Soesanto said.