Monde Nissin Achieves 7.2% Growth in Revenue while Cautious of Possible Global Food Crisis

Philippine-based food and beverage giant Monde Nissin has announced a 7.2% growth in its consolidated revenues upon the company’s release of its unaudited results in the first quarter of 2022. Despite this, Monde Nissin states that although consolidated revenues were able to reach P18.3 million due to Asia-Pacific’s strong performance, the company’s net income has also declined due to rising input costs, according to Jesse Teo, Monde Nissin’s chief financial officer.

“Core net income attributable to shareholders for the quarter saw a decrease of 13.5 percent to P2.1 billion, while reported net income ended almost unchanged at P2.3 billion, benefiting from lower interest expense due mainly to the repayment of the Arran convertible note and bank loans in 2021,” Monde Nissin states.

The company’s president, Henry Soesanto also warns of a possible global food crisis due to the effects of the Ukraine-Russia war. Soesanto also states that marginalized countries such as Africa could be most affected by the food crisis.

Ukraine and Russia make up 30% to 40% of wheat supply globally, and 40% of sunflower oil supply. According to Teo, palm oil and wheat prices have increased, with the price of wheat skyrocketing due to the Ukraine-Russia war and palm oil prices shooting up due to top producer Indonesia’s imposed ban on palm oil exports. Both palm oil and wheat are integral to Monde Nissin’s products, as it makes up around 45% of the company’s raw material costs.

Despite this, Monde Nissin was able to power through from forward contracts. Teo says while contract prices have been significantly higher compared to the previous year’s, they were still much lower compared to spot prices.

Meanwhile, Soesanto states that despite the challenging business climate, Monde Nissin still remains optimistic for the company’s potential growth. “We are working hard to continually improve our efficiency and being mindful of our consumers when price increases become warranted, striving to maintain our growth momentum and recovering margin where possible,” says Soesanto.

Source: ABS CBN