SINGAPORE (Sept 7): Del Monte Pacific Limited has reversed into profitability with 1Q earnings of US$0.7 million ($0.9 million) on robust performance of its Asian businesses, compared to a net loss of US$7.0 million a year ago.
Del Monte Pacific achieved sales of US$473.8 million for the three months ended July, 1% higher than prior year period on strong performance of S&W in Asia and the Middle East, which offset lower sales in the United States.
The first quarter is seasonally its weakest quarter accounting for only 19-21% of full year sales, says the group.
The group’s US subsidiary, Del Monte Foods, Inc (DMFI), contributed US$336.5 million or 71% of Group sales. DMFI’s sales declined by 4% mainly due to reduced sales in private label and regional brands in foodservice as a result of competitive pricing.
This was offset by higher sales of the group’s second largest subsidiary, Del Monte Philippines, Inc (DMPI), with sales of US$131.4 million, up 14% versus the same quarter last year. DMPI’s sales comprise of sales in the Philippines and exports.
Sales of the S&W business continued its strong performance achieving double digit growth, mainly due to strong sales of fresh pineapple on the back of improved supply and expansion into Turkey, a new market for packaged products.
The group’s gross margin for the first quarter increased to 20.7% from 20.4% in the same period last year.
EBITDA for 1Q came in at US$32.2 million, 26% higher versus prior year quarter’s US$25.5 million.
No dividends were declared for the quarter.
Joselito D Campos, Jr, Managing Director and CEO of Del Monte Pacific, says, “Our business in Asia continued its strong momentum in the first quarter driven by DMPI’s growth through S&W’s significant progress as it expanded its business in existing markets and broke ground in new markets. In the Philippines, we continued to drive increased consumption frequency amongst a wider base of consumers through sustained investments in advertising, product innovation and expanded trade availability.”
Barring unforeseen circumstances, the group says it will be profitable for FY18 on a recurring basis.
Shares in Del Monte Pacific last traded at 31 cents, down 4.6% year to date.
