Key Sentence:
- Monde Nissin – controlled by tycoon Betty Ang and her family expects earnings to recover in the second share of the year.
- After revenues declined in the six months to the end of June due to high taxes and rising commodity prices.
Thursday’s net profit fell 96 percent in the first half of the year to 204 million pesos ($4 million). Mainly due to non-refundable costs associated with convertible bond buybacks and deferred tax liabilities. Excluding items, Monde Nissin from the Philippines net profit fell 13% to 4.3 billion pesos. As higher prices for essential commodities such as palm oil and wheat resulted in lower gross profit.
“The second half looks more promising,” said Henry Soesanto, CEO of Monde Nissin, in a virtual media briefing.
Monde Nissin expects average single-digit sales growth for the entire year, supported by higher prices for pasta. And biscuits and increased sales of a meat alternative, Quorn Foods, expanding its distribution network in the US.
“High commodity prices are temporary and need to be mitigated by current price increases. And efficiency programs,” Metro Securities’ first analyst Estella Del Villamil said in an email to Forbes Asia. “We still expect Nissin month to do better.”
First Metro expects Monde Nissin from the Philippines net profit before exclusive items to increase 62% to P11.9 billion this year, with sales rising 6.9% to P72.6 billion. In addition to its dominant market share in the Philippines’ noodle and biscuit market, the brokerage firm said alternative meat subsidiary Quorn Foods would be a key growth driver as it expands distribution channels in the United States.
Quorn sales fell 0.6% to P7.5 billion, representing 22% of Monde Nissin’s total sales of P3.3 billion in the new half of this year. The UK has pesos 5.9 billion in sales. While the United States has pesos 683 million and the rest of the world has pesos 968 million.
“The potential of Quorn in the United States is huge,” said Soesanto.
Monde Nissin is betting heavily on alternative meats, which he sees as his next area of growth. The company acquired Quorn in 2015 for £550 million ($759.4 million) and plans to spend more than half of the 48.6 billion pesos it raised in the Philippines’ most extensive initial public offering in June.