FAST NEWS: Nissin Foods’ Parent Profit Doubles in Its Fiscal Third-Quarter
The latest: Japan’s Nissin Foods Holdings Co. Ltd, the controlling shareholder of Hong Kong-listed Nissin Foods Co. Ltd. (1475.HK), Friday morning announced its fiscal third quarter results for the period through December last year, with total sales jumping 30% year-on-year to 14.69 billion yen ($128 million).
Looking up: Nissin Foods Holdings’ operating profit surged 94.7% to 1.81 billion yen in its third fiscal quarter, benefiting from increased sales of its Cup Noodles brand in China and the appreciation of the Chinese yuan against the Japanese yen.
Take Note: In the first three quarters of its fiscal year, Nissin Foods Holdings’ core operating profit increased just 3.5% year-on-year to 4.32 billion yen. Excluding foreign exchange rates, its core operating profit was roughly flat, rising only 1% year-on-year to 3.95 billion yen.
Digging Deeper: The Hong Kong-listed Nissin Foods Co. Ltd. benefited from increased demand for its instant noodles and frozen foods during the Covid-19 outbreak, with revenue from its mainland China business segment up 12% year-over-year in the first three quarters of last year. However, the company’s gross margin and net profit fell year-over-year during the period, dragged down by higher raw material prices. To offset the impact, the company last month announced it would increase prices for its major instant noodle products in mainland China by mid-single-digit percent amounts effective in March, representing its first increase in 11 years.
Market Reaction: Nissin Foods Co. Ltd.’s Hong Kong-listed shares jumped as much as 4.2% Friday morning to HK$5.96, before closing 3.1% higher at HK$5.90 at the midday break. But the stock is still down about 10% from its high of HK$6.50 in early January.
Translation by Jony Ho
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