SINGAPORE (Dec 5): Del Monte Pacific (DMP) recorded a loss of US$2.82 million ($3.80 million) in 2Q18 ended Oct, compared to restated earnings of US$20.0 million in 2Q17.
However, excluding one-off expenses of US$13.1 million due to the closure of three US plants, the group would have recorded earnings of US$10.2 million for the quarter from US$20.8 million a year ago.
Group turnover saw a 1.8% drop to US$624.7 million from a restated US$636.0 million in the previous year, mainly driven by lower sales in the US.
US subsidiary, Del Monte Foods (DMF) contributed US$485.6 million or 77.7% of the total sales.
DMF’s sales declined by 1.6% mainly due to unfavourable pricing in foodservice and USDA, and higher trade promotion spending.
Cost of sales increased 1.4% to US$496.3 million compared to US$489.3 million last year.
Hence, gross profit for the second quarter ended October came in at US$128.4 million, 12.5% less than US$146.7 million recorded in 2Q17.
During this period, the group recorded other operating losses of US$9.18 million compared to a gain of US$0.93 million a year ago.
The group also recorded provision of asset impairment of US$21.9 million in 2Q18, which was absent in the previous year.
To raise more equity and repay loans, DMP is offering US$80 million Series A-2 preference shares with an oversubscription option of up to US$80 million at a coupon rate of 6.5% per annum.
The offer period is Nov 28 to Dec 8 with the listing set for Dec 15 on the Philippine Stock Exchange (PSE).
In its first tranche offering of preference shares listed on April 7, the group raised US$200 million.
Looking forward, the group will continue to expand its existing branded business in Asia, through the Del Monte brand in the Philippines, where it is a dominant market leader.
Subsequently, S&W, both packaged and fresh, will continue to gain more traction as it leverages its distribution expansion in Asia and the Middle East, while the group’s joint venture in India will continue to generate higher sales and maintain its positive EBITDA.
Shares in DMP closed at 30 cents on Tuesday.
