Monde Nissin Corporation’s Meat Alternative Business Continues to Weigh Down Financial Performance in 2023
Monde Nissin Corporation’s meat alternative business, operating under the brand Quorn, has been a persistent challenge for the company’s financial performance in 2023, offsetting growth in other segments.
The company disclosed to the Philippine Stock Exchange that it expects a single-digit decline in the fourth quarter for its Meat Alternative business, citing a challenging environment and a weak UK retail market as contributing factors.
Despite the tough market conditions, the firm anticipates achieving at least EBITDA neutrality in the fourth quarter. Monde Nissin CEO Henry Soesanto stated that the previously implemented restructuring of the Meat Alternative business has enabled the company to maintain EBITDA breakeven for the second consecutive quarter.
Soesanto also mentioned that while it’s difficult to predict volumes in the near-term, he is hopeful that lower commodity prices will provide some relief from cost inflation.
The firm also shared that the annual impairment test in its meat alternative business is ongoing, but the family’s financial support is expected to cover any potential impairment at the parent level.
Monde Nissin’s wholly-owned Singapore subsidiary, Monde Nissin Singapore Pte Ltd. (MNSPL), has received a significant financial support from the controlling family shareholders in relation to the valuation of the company’s Meat Alternative Business. This support aims to reduce net cumulative impairment, with settlement, if any, occurring on a one-time basis before June 30, 2033.
CEO Soesanto expressed that the financial support from himself and the family shareholders comes after considering concerns expressed by some shareholders about the challenges in the meat alternative category in the UK. He emphasized the long-term potential of the category but acknowledged the current headwinds being faced.
Notably, the firm is considering the sale of its meat alternative business, as the principal shareholders’ top-up obligation will be terminated in the event of the sale of 100 percent or a controlling stake in the business.
