SINGAPORE (Mar 8): Del Monte Pacific has announced a net profit of US$2.6 million ($3.5 million) for the 3Q ended Jan, turning around from the US$38.4 million loss a year ago due to improved margins
Excluding one-off items, the group would have registered a 3Q net income of US$3 million, down 11.2% from US$3.4 million a year ago due to the change in the US tax rate.
EBITDA grew 13% to US$39.7 million from US$35.1 million a year ago, although without the one-off expenses related to plant closures in the US, its recurring EBITDA would have been US$40.6 million versus US$46.4 million a year ago.
In the latest quarter under review, Del Monte generated US$528.7 million in revenues, down 12% from US$599.8 million the year before due to lower sales from the divested Sager Creek business, as well as lower private label sales.
While e-commerce sales in the US grew by double-digit volumes in 3Q, sales in the Phillipines domestic market fell 6% in peso terms and 10% in US dollar terms, mainly in the general trade and mixed fruit category due to operational issues in that channel.
Meanwhile, Del Monte says it continues to address these issues as its key foodservice channels continue to grow.
Gross margin nonetheless improved by 2.2 percentage points to 22.1% mainly driven by a better sales mix for the S&W business, which also saw higher sales due to higher sale volumes of fresh pineapple in North Asia, which offset sales declines in packaged products.
For the 9M ended Jan, Del Monte reported earnings of US$14 million against a loss of US$40.5 million. Excluding one-off items, 9M earnings would have been US$6.6 million, down 55.7% million from US$14.9 million a year ago.
While the group says it continues to face headwinds due to shifts in consumer demographics, Del Monte maintains it has the potential to greatly extend the reach of the Del Monte brand to its growing store perimeter, while allowing both Del Monte Foods, Inc and Fresh Del Monte Produce to optimise economies of scale.
Looking ahead, it expects to remain profitable in FY19 as it explores e-commerce opportunities for its range of products across markets.
As at 3.11pm, shares in Del Monte are trading flat at 15 cents.
