SINGAPORE (July 27): Del Monte Pacific reported a net loss of US$28.2 million ($38.4 million) in FY2018, versus earnings of US$24.4 million in FY2017.
This was due to the one-off expenses incurred in the closure of two plants belonging to US subsidiary, Del Monte Foods Inc (DMFI), and the write-off of deferred tax assets due to a change in US tax rates.
Excluding these one-off expenses of US$73.8 million, the group would have generated earnings of US$12 million in FY18.
In 4Q18, Del Monte Pacific generated sales of US$499 million, 8.5% lower than prior year period.
While sales were higher in the Philippines, these were offset mainly by lower, cyclical pineapple juice concentrate (PJC) prices in international markets, decreased exports of processed pineapple, and lower sales in the USA.
DMFI contributed US$380.6 million or 76% of group sales. DMFI sales ex-Sager Creek declined by 3.2% due to lower volume of canned vegetable and tomato products, as well as lower pricing in foodservice and USDA.
The group reported 4Q18 earnings of US$12.3 million, significantly higher than US$2.9 million as a result of the one-off gain from the purchase of DMFI loans at a discount in the secondary market.
In its outlook, Del Monte Pacific says the divestiture of Sager Creek and closure of plants in the US will lead to improvement in margins starting FY19 as well as stronger cash flow through lower inventories.
The group adds it will continue to review its manufacturing and distribution footprint in the US to improve operational efficiency and further reduce costs.
The increased investment in market and trade promotion spend will also strengthen its core business in the US.
Del Monte Pacific expects to stay profitable in FY19, barring unforeseen circumstances.
At at 12.39pm, shares in Del Monte Pacific are trading flat at 18 cents.
