Monde Nissin Corp. on Wednesday said its core attributable income for the nine months of the year fell 3 percent to P7.19 billion from the previous year’s P7.45 billion on higher prices of commodities, such as edible oils.
Henry Soesanto, the company’s CEO, said its Asia Pacific branded food 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. 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,’ Soesanto said.
‘We expect these efforts to drive gradual gross margin recovery in the succeeding quarters, though full year gross margin is still expected to be lower than last year.’
As for its veggie meat business, he said the company is seeing continued easing of year-on-year declines and the significant gross margin improvement this quarter, which expanded by over 500 basis points year-on-year.
‘While category conditions remain challenging, the improvement in EBITDA [earnings before interest, taxes, depreciation and amortization] demonstrates that our initiatives are making steady progress. We will continue to focus on driving efficiency and supporting a gradual recovery as we navigate the current market environment.’
Net sales for the nine-month period rose 3 percent to P63.26 billion from the previous year’s P61.14 billion.
Its branded food group, with products such as Lucky Me! noodles and Sky Flakes biscuits, rose 4 percent to P53.28 billion from the previous year’s P51.05 billion, but its alternative meat business fell 1 percent to P9.97 billion from P10.09 billion recorded a year ago.
For the third quarter alone, its attributable core income inched up by 4 percent to P2.45 billion from the previous year’s P2.35 billion. Sales, meanwhile, grew 4 percent to P21.8 billion from P21.01 billion a year ago.
Gross margin contracted 279 basis points year-on-year to 34.8 percent for the nine months and 355 basis point to 34.4 percent in the third quarter, primarily due to higher edible oil costs. On a sequential basis, however, gross margin improved by 153 basis point, reflecting the impact of pricing actions and early benefits of cost management initiatives, the company said.