Del Monte Pacific incurs net loss
LISTED Del Monte Pacific Ltd. (DMPL) recorded a net loss in the second quarter of its fiscal year, led by lower sales in the United States and a decline in export receipts.
In a regulatory filing on Thursday, DMPL said it posted an $8 million net loss during the August-to-October period, a reversal of the $50 million net profit last year.
“We faced a tough quarter as lower pineapple supply, higher costs and consumer spending trends impacted our margins and operating performance. In addition, higher interest charges also affected the group’s bottom line,” DMPL Managing Director and Chief Executive Officer Joselito D. Campos, Jr. said.
“We expect that consumer spending will continue to be curbed by persistently higher living costs, mainly driven by high energy prices and rising borrowing costs. To address challenging market conditions, we will focus on effectively managing our inventory over the next nine to 12 months. Additionally, we will explore opportunities to enhance our capital structure, reduce leverage, and minimize interest expenses,” he added.
According to DMPL, it logged a 5% decline in sales to $667.1 million due to 2% lower sales in the US by subsidiary Del Monte Foods, Inc. (DMFI) worth $494.6 million, and lower exports of fresh and packaged pineapple by Del Monte Philippines, Inc. (DMPI).
“DMFI grew its leading market share positions across its core businesses of canned fruit, vegetable and tomato with higher-margin branded retail products increasing as a proportion of overall mix,” DMPL said.
In the second quarter, Philippine sales fell 1% to $107.8 million, but were flat in US dollar terms.
“Sales in the culinary and beverage segments experienced growth, driven by the launch of strategic campaigns. Spaghetti sauce’s birthday campaign, including the limited edition birthday collectibles, resonated well with consumers as it reinforced Del Monte’s value amidst the inflationary environment,” DMPL said.
In the first half, DMPL recorded a $22 million net loss compared to the $19 million net profit in the same period a year ago.
DMPL said its sales rose 2% to $1.2 billion led by higher sales in the US but posted a 28% decline in gross profit to $244 million due to higher costs.
Meanwhile, DMPL said it is expecting to deliver higher branded revenue growth for fiscal year 2024.
Amid the uncertainty, the company added that it is implementing various strategies such as optimizing packaging materials, implementing power and fuel initiatives, making investments to enhance efficiency, productivity, and wastage minimization, and introducing product bundling initiatives in distribution centers.
Shares of DMPL at the local bourse fell 70 centavos or 9.46% to P6.70 apiece on Thursday. — Revin Mikhael D. Ochave
