Monde Nissin net income down in first half; sees July drop in noodle sales over scare

Art Fuentes, ABS-CBN News

Posted at Aug 10 2022 09:32 PM

MANILA - Lucky Me and Skyflakes maker Monde Nissin saw its net income decline in the first half as prices of imported raw materials for its main products climbed on the world market.

The company also said its noodle business took a hit in July following the controversy over traces of ethylene oxide being found in some products.

Monde Nissin however said sales are recovering after the Food and Drug Administration cleared its noodle products as safe for consumption. 

The company said that based on its unaudited financial results, core net income attributable to shareholders declined 4.1 percent to P4.1 billion in the first six months of the year.

Consolidated revenues however increased 10.1 percent to P37.2 billion in the first half as growth accelerated in the second quarter to 13.1 percent. 

Following the European Union’s ban on Lucky Me products, the company’s noodle business fell 15 percent.

The EU imposed the ban after detecting traces of ethylene oxide in some of the products.

Monde Nissin however contested that the chemical was not used in food production, and the EU’s standards were stricter than most other countries, including the US, Canada and Singapore.

“There was some confusion, and that’s why in July, our instant noodle business was down 15 percent versus a year ago,” said company chief financial officer Jesse Teo.

Sales from Monde Nissin’s other products however picked up and made up for the weakness in noodle sales, Teo said. 

“This will have a dampening effect on our Q3 results; however, our sales and marketing teams are working hard to regain lost momentum and to position us for future growth,” said Monde Nissin CEO Henry Soesanto. 

The company is also cautiously optimistic about its prospects, Soesanto said, as the cost of raw materials like wheat have been falling on the world market. 

Monde Nissin said its financial position remains strong with P13.8 billion in cash and cash equivalents and stable net debt-to-equity ratio of 0.23.