Monde Nissin earmarks P7.2 billion for capex to boost capacity

MANILA, Philippines — Snack food giant Monde Nissin Corp. is nearly doubling its capital spending this year to beef up its capacity.

Monde Nissin chief financial officer Jesse Teo said the company has allocated P7.21 billion for capital expenditures this year, significantly higher than last year’s P3.64 billion.

Of the amount, Teo said P6.2 billion will be dedicated to its Asia-Pacific branded food and beverage (APAC BFB) business.

“I mentioned about a a long term lease that we entered into in the Philippines in Pampanga. That itself is almost a billion right of use assets that we will be booking. That forms a major part,” Teo said.

“In addition, we have the completion of our facilities in Carmelray, in Davao. All those projects are ongoing and also some projects that we are working on that we cannot divulge at this point. But a lot of it in our bakery business, meaning biscuits and cakes, that we need to catch up on capacity in order for us to serve the volumes that our consumers are demanding,” he said.

As the company expands, Teo said Monde Nissin is also taking the opportunity to diversify its supply base.

“So that we are not reliant on one plant. This will also ensure that products get to our ultimate consumers as fresh as possible,” he said.

Meanwhile, Monde Nissin earmarked the remaining P1 billion capex for 2024 for its meat alternatives business.

“We have a robust operating cash flow. Our total budget of P7.2 billion can be funded by cash flow from operations,” Teo said.

Monde Nissin was able to trim its net loss to P625 million in 2023 from a P13 billion net loss incurred in the previous year.

Monde Nissin said the net loss during the year was mainly due to a non-cash, non-operating impairment of assets in the meat alternative business of P10.1 billion after-tax, partly offset by P1.3 billion of guaranty asset gain.

Core net income attributable to shareholders, however, grew by 15.7 percent year-on-year to P7.6 billion due to the record core net income of APAC BFB of P8.6 billion.

Revenue last year likewise improved to P80.17 billion from P73.94 billion in 2022.

“The APAC BFB business saw strong topline growth and profitability, driving record revenues and translating into strong operating cash flows. This growth was aided by both volume and price across all our categories,” Monde Nissin chief executive officer Henry Soesanto said.