Philippine-based Monde Nissin, the owner of the Quorn brand, expects to recognise another impairment charge on its meat-alternative business.
The publicly listed group said its “ongoing annual impairment test” for the division “indicates a significant impairment charge” for 2024, ranging from £80m ($100.7m) to £100m.
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The impairment would follow similar charges on Monde Nissin’s meat-free arm in 2023 and 2022. An impairment of 10.1bn pesos ($178.2m) was booked for 2023, adding to the 20.5bn pesos in the previous fiscal year.
Monde Nissin made the disclosure of the latest impairment in a stock-exchange filing that included “preliminary” fourth-quarter financial results for 2024.
The company’s said its meat alternative unit “continues to operate in a challenging environment”. The company is expecting to report the division’s sales dropped at a “mid-teens” rate in the fourth quarter year on year.
In November, Monde Nissin said its meat-alternative business unit generated a “core” net loss attributable to shareholders of 169m ($2.9m) pesos in the third quarter of the year versus one of 213m pesos in the same period in 2023.
The unit booked an 8.3% drop in reported net sales to 3.3bn pesos. On a comparable basis, sales were down 5%. Over the first nine months of the fiscal year, its net sales were down 5.6%, with Monde Nissin pointing to the “softness” of the category.
In October, Monde Nissin appointed former Heineken executive David Flochel as the new CEO of the division, also known as Quorn Foods.
In yesterday’s fourth-quarter update, Monde Nissin said its APAC branded food and beverage (BFB) division saw “strong” revenue growth, increasing by over 8% year-on-year.
The company said the growth was driven by volume increases across all categories and contributions from both domestic and international markets.
Monde Nissin Henry Soesanto CEO said the group’s preliminary fourth-quarter results “reflect sustained momentum from the third quarter, driven by our APAC BFB business”. He added: “This has resulted in record-high revenues for both the quarter and the year.”
Looking at the full year, the company anticipates consolidated sales growth exceeding 3% year-on-year, with a gross margin expansion of over 350 basis points, primarily driven by the APAC BFB business.
Monde Nissin’s APAC BFB business comprises three product groups – instant noodles, biscuits and other products.
Monde Nissin also expects a more than 25% increase in “core” net income for 2024.
The company is scheduled to report its full accounts next month.
