Philippine-based Monde Nissin, renowned for its ownership of the Quorn brand, is poised to report yet another impairment charge on its meat-alternative segment. This comes as part of the company’s ongoing assessment of its assets, which suggests a significant impairment ranging from £80 million ($100.7 million) to a maximum of £100 million for the fiscal year 2024.
This upcoming impairment follows considerable charges recorded for Monde Nissin’s meat-free division in the previous years, including a notable impairment of 10.1 billion pesos ($178.2 million) for 2023 and an earlier charge of 20.5 billion pesos in the 2022 fiscal year. The latest disclosure was included in a stock-exchange filing that also discussed “preliminary” results for the fourth quarter of 2024.
The company acknowledges that its meat alternative unit “continues to operate in a challenging environment.” Sales for this division are projected to decline at a rate in the “mid-teens” compared to the same quarter last year. In November, Monde Nissin disclosed that its meat-alternative business reported a “core” net loss of 169 million pesos ($2.9 million) in the third quarter of this year, a slight improvement from the 213 million pesos loss recorded in the same period last year.
Reported net sales for this unit fell by 8.3% to 3.3 billion pesos; when adjusted for comparability, sales were down 5%. For the first nine months of the fiscal year, net sales decreased by 5.6%, a decline attributed to overall softness in the category.
In an effort to revitalize the brand, Monde Nissin appointed David Flochel, a former executive from Heineken, as the new CEO of the division, known as Quorn Foods, in October. This leadership change aims to address the challenges facing the meat-alternative market and align with current food and drink consumer trends.
In the recent fourth-quarter update, Monde Nissin revealed that its Asia-Pacific (APAC) branded food and beverage (BFB) division experienced robust revenue growth, exceeding 8% year-on-year. The strong performance can be attributed to an increase in volume across all product categories and a contribution from both domestic and international markets.
Henry Soesanto, CEO of Monde Nissin, stated that the preliminary results for the fourth quarter demonstrate “sustained momentum from the third quarter, driven by our APAC BFB business.” He emphasized that this resulted in record-high revenues for the quarter and the year, showcasing the resilience of the food and beverage industry.
Looking ahead, the company anticipates consolidated sales growth of over 3% year-on-year, alongside a gross margin expansion exceeding 350 basis points, largely propelled by the APAC BFB segment, which includes instant noodles, biscuits, and other products. Furthermore, Monde Nissin expects more than a 25% increase in its “core” net income for 2024.
Monde Nissin plans to release its full financial accounts next month, providing further insights into the evolving landscape of the food and drink business.
