Monde Nissin expects higher revenue growth, but sees lower profits

Food maker Nissin Corp. is expecting its sales to grow by mid-single digit this year, but the bottom line might go down due to higher expenses.

At a virtual press briefing on Thursday, Monde Nissin chief finance officer Jesse Teo said, “For revenue guidance, we are targeting mid-single digits revenue growth.”

“For bottom line, we will guide towards a margin decline,” he said, noting that the company will continue to spend on marketing and product development “in order to make the right product and increase brand awareness to our consumers but we will strive to offset that with cost savings.”

Teo reported that the company’s unaudited core net income slipped by 12.9% to P4.3 billion in the first half of 2021 while its net sales saw a modest 1.2% growth to P33.8 billion supported by a balanced portfolio and increased Asia-Pacific Branded Food and Beverage Business (APAC BFB) international sales.

Unaudited reported net income declined to P204 million, which primarily includes non-core and non-recurring items such as price difference and interest on redemption of the Arran convertible notes at the initial public offering (IPO) price of P13.50 per share, IPO-related expenses, and deferred tax liability adjustments reflecting revised corporate tax rules in the United Kingdom.

The company’s earnings before interest, taxes, depreciation, and amortization also declined by 14.5% to P7.2 billion year-on-year driven by increased investment in new product development and higher advertising and promotion spent for brand building.

“Our business proved resilient in the first half of the year achieving modest topline growth. We undertook some price increases in June to partly recover rising commodity input costs and continue to implement supply chain cost savings,” said Monde Nissin chief executive officer Henry Soesnato.

“The price increases we took in the Philippines in June should partly alleviate the pressure on gross margins, but we must be mindful of the difficult circumstances our consumers are currently going through. The recently announced stringent quarantine in the National Capital Region and some other parts of the country will be difficult for many,” Soesanto said.

“Monde Nissin being a consumer-focused company, my main priority is to continue to earn their long-term support and trust through fair treatment and good value products,” he added.

Soesanto noted that the company is “willing to take a dip in margins for support of the consumers.”

“It’s too soon to talk of full year earnings guidance but I believe mid-single digit revenue growth for the full year should be possible,” the Monde Nissin chief said.

Monde Nissin is the company behind popular household brands Lucky Me!, SkyFlakes, Fita, Nissin, M.Y. San Grahams, Mama Sita's, and Dutch Mill.—AOL, GMA News