Monde Nissin reported lower Q2 profit

Noodle and biscuit Monde Nissin Corp. said Thursday slowing consumer consumption and lower sales of its vegan meat business reduced its second-quarter core net income by 16.8 percent to P1.63 billion from P1.96 billion.

Second-quarter net sales, however, rose 3.2 percent year-on-year to P19.14 billion from P18.8 billion a year ago.

Monde Nissin chief executive Henry Soesanto said in a news briefing its Asia-Pacific branded food and beverage business saw a moderate growth in the second quarter as volume growth slowed down in all categories, most noticeably in noodles.

“This reflects that 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,” Soesanto said.

The group’s meat alternative business reported an 8.8-percent decline in sales due to the continued category headwinds and challenging retail market. Sales volume decreased 13.5 percent year-on-year.

Core net income attributable to shareholders declined 14.1 percent in the first half to P3.5 billion.

Seosanto said the P3.5-billion restructuring cost in the company’s meat alternative business is almost complete and on track to deliver previously guided savings.

First-half core gross margin declined by 290 basis points to 30.5 percent due to dilutive effect of price increases versus inflation, higher overhead costs and lower volume

Seosanto said despite the slowdown in overall business, the third quarter was expected to show better year-on-year growth on last year’s lower base.

The recent decline in commodity prices will also support margin recovery for the remainder of the year, he said.

Given the continued challenges in vegan meat business, Monde Nissin said the company’s expansion plans would focus on building the capacity and capability of its branded food business.