Monde Nissin Corp. said Thursday noodle sales fell 15 percent in July after several European countries issued health warnings and product recall against the company’s top-selling Lucky Me! brand.
Monde Nissin chief executive Henry Soesanto said in a news briefing the decline in noodle sales in July would have “dampening effect” on the company’s third-quarter results.
“Our noodles sales for July declined 15 percent from the previous year, making overall domestic sales for the month flat. This will have a dampening effect on our third-quarter results; however, our sales and marketing teams are working hard to regain lost momentum and to position us for future growth,” Soesanto said.
Food safety regulators in the European Union and Taiwan said in July Lucky Me! instant noodles and pancit canton produced in Thailand were found to contain traces of unauthorized chemical ethylene oxide.
The Philippines Food and Drugs Administration also conducted an inquiry and reported that all tested products in the country complied with local regulations.
Monde Nissin reported an 8.7-percent increase in core net income attributable to shareholders in the second quarter to P1.96 billion on higher revenues mainly from domestic business.
Asia-Pacific branded food and beverage domestic business registered an 18.9-percent increase in second-quarter revenue on the back of price increases and volume growth across all categories.
The company implemented an average of 5-percent to 8-percent increase in prices across brands to reflect the rising cost of inputs in April.
Monde Nissin’s meat alternatives reported a 2.3-percent decline in revenues on weaker sales in the United Kingdom.
Monde Nissin’s first-half net income went down by 4.1 percent to P4.08 billion, despite the 10.1-percent increase in revenues to P37.17 billion.
The company said to address inflationary pressures, it locked in supply of key commodities for the remainder of the year and minimize supply risks.
“We are cautiously optimistic that the recent pullback in commodity prices may benefit our margins once we cycle through our already-procured wheat and palm oil inventory, but caution that substantial uncertainty remains,” Soesanto said.