Monster Beverage reports financial results and can shortages

Monste​r Beverage Corporation has reported financial results for the three- and six-months ended 30 June 2021, including an update on the impact of the Covid-19 pandemic.

Despite the ongoing impact of the pandemic, the company achieved record second quarter net sales. It continues to experience shortages in its aluminium can requirements in North America and Europe, given its volume growth and the current supply constraints in the aluminium can industry. It is also experiencing delays in procuring certain ingredients, both domestically and internationally.

As a result, it has not been able to fully satisfy demand in the United States and EMEA in the 2021 second quarter. The company has taken steps to source additional quantities of aluminium cans from the United States, South America and Asia, however, logistical issues, including shortages of shipping containers and port of entry congestion, could delay the ongoing international supply of aluminium cans​.

As of 30 June 2021, the company had $1.58 billion in cash and cash equivalents, $969.0 million in short-term investments and $91.0 million in long-term investments. Based on currently available information, the company does not expect the Covid-19 pandemic to have a material impact on its liquidity.

The adverse impact of the pandemic on net sales was more pronounced in the comparative 2020 second quarter.

Net sales for the 2021 second quarter increased 33.6% to $1.46 billion, from $1.09 billion in the same period last year. Net changes in foreign currency exchange rates had a favorable impact on net sales for the 2021 second quarter of $38.6 million.

Vice chairman and co-chief executive officer Hilton H Schlosberg, said: “The company experienced challenges keeping up with demand in the second quarter in the United States and in EMEA, largely as a result of a shortage in aluminium cans. In order to satisfy increased demand, we have secured aluminium cans in excess of our contracted volumes from the United States, South America and Asia, with expected deliveries increasing sequentially during the latter half of the year. However, the shortage of shipping containers, as well as global port congestion may delay the arrival of imported cans. In addition, the company has entered into supply agreements with two new aluminium can suppliers in the United States, which are expected to be operational in the 2021 fourth quarter.

“To meet such increased demand, we experienced freight inefficiencies in the United States and in EMEA, which resulted in increased costs of sales as well as increased operating expenses in the 2021 second quarter.  We are continuing to experience increased input costs including from aluminium.”

Gross profit as a percentage of net sales for the six-months ended June 30, 2021 was 57.4%, compared with 60.1% in the comparable period last year.

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