Del Monte Pacific back in the black

Del Monte Pacific, which is listed in Singapore and the Philippines, says it expects to continue to be profitable in the 2017 financial year.
Del Monte Pacific, which is listed in Singapore and the Philippines, says it expects to continue to be profitable in the 2017 financial year.PHOTO: BLOOMBERG

One-off gain, strong Asia results help firm stage turnaround in Q4

Food and beverage company Del Monte Pacific is back in the black for the fourth quarter, thanks in part to a one-off gain.

It recorded a net profit of US$19.2 million (S$26 million) for the three months to April 30, against a net loss of US$4.2 million in the same period a year ago.

The turnaround was due to a one-off gain of US$8.4 million after tax as well as strong operating results across Asia, it said yesterday.

Turnover slipped 2.8 per cent to US$520.1 million due to lower sales at United States subsidiary Del Monte Foods, although this was partially offset by a strong performance in the Philippines under the Del Monte brand as well as the rest of Asia under the S&W brand, it noted.

Full-year earnings jumped to US$51.5 million compared with a net loss of US$43.2 million a year earlier, while revenue rose 3.7 per cent to US$2.27 billion.

Gross margins during the quarter expanded to 21.3 per cent from 20 per cent previously, on the back of productivity gains and cost-reduction initiatives, said Del Monte Pacific. Earnings per share for the quarter came in at 0.99 US cent, an improvement over the losses per share of 0.25 US cent previously.

  • AT A GLANCE

  • NET PROFIT: US$19.2 million (Not applicable)

    REVENUE: US$520.1 million (-2.8%)

    DIVIDEND: 1.33 US cents per share (Nil)

Earnings per share was 2.65 US cents for the full year, much higher than the losses per share of 3.1 US cents previously. Net asset value per share stood at 18.77 US cents as at April 30, up on the restated 16.68 US cents as at the same time last year.

The group, which is listed in both Singapore and the Philippines, has proposed a final dividend of 1.33 US cents per share, representing a 50 per cent payout of its full-year net profit compared with none in the previous year.

"During the past year, we continued to lay the foundation for future growth," said Mr Joselito Campos Jr, Del Monte Pacific managing director and group chief executive.

"We drove improvements in our cost structure and better aligned operations with our strategic direction to gain market share, increase margins and expand into adjacent categories as part of a long-range plan to grow sales and profits for the company in the years ahead."

Del Monte Pacific said it expects to continue to be profitable in the 2017 financial year.

"In the short to mid-term, Del Monte Pacific plans to improve its financial performance by strengthening its core business, leveraging procurement synergies and optimising G&A (general and administrative) costs," it said, noting that the closure of its North Carolina plant was part of this streamlining effort.

The group will shift to a leaner organisation model in the US, it added.

Del Monte Pacific shares closed four cents or 12.7 per cent higher at 35.5 cents yesterday, after the results were released.

A version of this article appeared in the print edition of The Straits Times on June 30, 2016, with the headline 'Del Monte Pacific back in the black'. Print Edition | Subscribe