Monde Nissin noodles sales fell 32% in Q3 after Lucky Me! recall
Food conglomerate Monde Nissin Corp. said noodle sales in the third quarter plunged 32 percent after Lucky Me! products in Europe were recalled.
The recall in Europe, which follows strict rules in food processing, were triggered by fears of chemical contamination in Lucky Me! instant noodles. These were later found to be safe for consumption by the Philippine Food and Drug Administration.
Officials earlier downplayed the development in Europe, saying revenues in the continent accounted for about 0.2 percent of sales at its flagship branded foods division.
During a late Wednesday briefing, Monde executives underscored their commitment to meet all global standards.
“Some of the [decline] was due to the reaction on the recall in Europe but part of it was self-inflicted as we had to make sure we prepared to be more globally compliant,” said Monde chief financial officer Jesse Teo.
Monde CEO Henry Soesanto said noodle sales saw “significant recovery” at the start of the fourth quarter as the company adjusted its manufacturing processes.
Article continues after this advertisement“Our efforts have largely corrected the impact as we have seen significant recovery in October, and we are continuing to work to resume the growth which we have seen earlier this year and last year in this category,” he said.
Article continues after this advertisement“Additionally, we have enhanced our sourcing, testing, and overall processes in an effort to ensure that our products adhere to all food quality compliance standards, regardless of what jurisdiction they are sold in,” he added.
The decline in noodle sales were partially offset by strong growth in Monde’s biscuits segment and beverages on the back of price increases and higher volumes.
Net sales in the third quarter slipped 0.2 percent to P17.72 billion and rose 6.7 percent to P54.9 billion in the first nine months of the year.
Core profits from January to September fell 20.9 percent to P5.6 billion as margins came under pressure due to higher raw material prices and logistics bottlenecks.
Monde said in a statement that core gross margin during the nine-month period fell by 490 basis points to 33.2 percent.
Meanwhile, reported net income surged nearly 142 percent to P5.6 billion mainly due to non-recurring items and the lower tax base, it added.
