Monde Nissin’s shares drop as it posts P13-billion net loss in 2022

MONDE NISSIN Corp. was one of the most actively traded stocks last week after it reported that it posted a P13-billion net loss in 2022 as its alternative meats unit underperformed.

Data from the Philippine Stock Exchange showed a total of P631.07 million worth of 69.82 million shares were traded from April 3-5, making it the fourth most actively traded stock in the local market last week.

Financial markets were closed on Thursday and Friday in observance of Holy Week.

Shares of the Ang-led food manufacturer company dropped by 6% week on week to P9.22 apiece on Wednesday from its P9.81 finish on March 31. For the year, the stock fell by 16.8%.

“Monde saw its share price tumble mainly due to the lower-than-expected earnings it released… This was mainly attributable to its alternative meat business underperforming,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message on Wednesday.

In a disclosure to the stock exchange on March 30, the food manufacturing giant reported a P13.03-billion net loss in 2022, due to an impairment of intangible assets in its meat business under Marlow Foods. This was a turnaround from the P3.12 billion net income in the previous year.

Henry Soesanto, chief executive of Monde Nissin, said “the impairment was caused by the application of a higher discount rate due to the prevailing higher interest rates and risk premiums, some margin compression, and rationalization of the trend in the meat alternative category.”

The recorded nonrecurring net loss of P19.6 billion was mainly attributed to the impairment and restructuring costs of the company’s alternative meat business, Quorn and Cauldron, which is owned by Marlow Foods.

The top line of its alternative meat business increased by 1% to P15.4 billion, mainly due to the price increases, strong growth in food service, and market share gain in its United Kingdom retail business.

Meanwhile, Mercantile Securities Corp. Analyst Jeff Radley C. See said in a Viber message that the company’s net loss was mainly due to the increased prices of their raw materials, which dealt a blow to its alternative meat business.

Mr. Limlingan said investors should pay attention to the company’s alternative meat business and future acquisitions.

Mr. See also cited Monde Nissin’s investment in Figaro Coffee as one of the company’s moves to expand its business reach. Earlier this year, it acquired a 15% ownership in Figaro Coffee Group amounting to P820.27 million.

Monde Nissin recorded a net loss attributable to parent amounting to P13.02 billion last year, a reversal from the P3.12 billion net income recorded in 2021.

Its revenues, meanwhile, increased by 6.6% to P73.88 billion in 2022 from P69.28 billion in the previous year.

“As the company exhausts the commodities it locked in at high prices, we should expect some improvements in its margins quarter on quarter especially under the company’s APAC (Asia-Pacific) business. However, on a year-on-year basis, we are not as optimistic,” Mr. Limlingan said.

For this week, Mr. See placed the stock company’s support levels at P9.00 and P8.66, while resistance levels are at P9.81 and P1.00.

“We see support levels at 9.00 and resistance at 9.50. However, it is difficult to add a definite support and resistance as there is no historical basis for the prices to settle as shares are at all-time lows,” Mr. Limlingan said. — Mariedel Irish U. Catilogo