Monde Nissin releases earnings teaser headlining 2% revenue growth; uh-oh
The behemoth snack manufacturer released a teaser press release about the company’s Q4/21 and full-year financials, with a headline pumping Monde Nissin's [MONDE 13.50 0.60%] record P69.3 billion in revenue.
You know you’re in for some spice when a company doesn’t lead with net income, or even some curated internal metric, like core net income.
Even calling the P69.3 billion a “record” is a little misleading; when I read that, I’m thinking that they’ve blown the previous record out of the water, but here, the beat was only by 2%.
After that, everything kind of goes bad. Full-year net income was down 60.5%, which MONDE blames on “one-off items” like the Arran convertible note and the IPO itself.
Even baking in the lower effective tax rate gifted to MONDE by the CREATE Law, and excluding those “one-off” items, “core net income” was down 5.4% to P8.2 billion.
Core EBITDA was down 15.2%, which MONDE attributes to high inflation and “brand-building activities”.
MB BOTTOM-LINE
I can get behind looking past one-off charges related to the Arran note and the IPO, since those are not necessarily related to MONDE’s core business(es).
But it gets less inspiring to see core net income falling more than 5% during a year that should have been part of a “COVID recovery” narrative. Domestic growth was fairly flat, but its Asia Pacific segment had a 21.5% net sales increase.
Unfortunately, though, it appears as though inflation and higher oil prices will hit MONDE’s bottom-line. Gross profit fell 6.5%, gross margins were down 3.3%. MONDE’s margins are still healthy, but it’s worth watching and keeping in mind as global commodity prices continue to be insane.
I’m also interested to see how MONDE”s naming of Drew Barrymore as Quorn US’s “Chief Mom Officer” has impacted sales in that region.
I’d love to know more about how much this kind of promotional deal will cost MONDE, and what return shareholders should expect as a result of it.
I like the angle of going after the habitual “home kitchen” market, as opposed to the “cool kids” market, but I’d like to know more about how efficient this brand ambassador approach will end up being. It takes money to make money, but obviously it’s better if it takes a little less to make a little more!
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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