Monde’s performance was dragged down by non-cash losses at alternative meat business Quorn, bringing impairment losses over the last two years to nearly P31 billion.
The company said the additional impairment was due to “lower projected cash flow” and higher interest costs at Quorn, signaling a tough challenge ahead for the business.
Monde did not provide comparative earnings figures due to the adoption of new accounting standards.
Last year, it announced a P13 billion loss in 2022 after a non-cash impairment charge of P20.5 billion from meat alternatives.
The global meat substitute business is expected to reach $11.4 billion (P640 billion) in sales this year and is forecast to grow in the coming years as more customers shift toward healthier lifestyles.
For this reason, Indonesian tycoon Henry Soesanto, the CEO of Monde, has consistently stood behind Quorn amid losses.
Last year, Soesanto personally pledged 2.156 billion family-owned Monde shares to backstop accumulated losses in the meat alternatives business. This final amount will be calculated in 2032.
Monde shares fell 4.2 percent to P10.52 each on Thursday, valuing the pledged shares at P22.7 billion.
During a media briefing on Thursday, Quorn CEO Marco Bertacca said retail giants in the Untied Kingdom have cut their inventory for alternative meats because of lower demand.
But Quorn is responding by making sure more of its products are visible to customers and this requires continued collaboration with retailers.
Soesanto said the financial pledge blunted the impact on retained earnings, the source of dividends of shareholders. The company noted that losses were offset by a P1.3 billion guaranty asset gain last year.
It announced a regular cash dividend of P0.12 per share, set for payment by June 5 to shareholders on record as of May 10, 2024.
Monde’s revenues in 2023 rose 9.2 percent to P80.17 billion.
This was mainly due to Asia Pacific branded food and beverage (APAC BFB), which soared 12.6 percent to P65.94 billion.
Monde is nearly doubling capital spending in 2024 to P7.2 billion, with about 85 percent going to APAC BFB while the remainder deployed for meat alternatives.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.