Del Monte Pacific back in the black on strong Q3 earnings

Del Monte Pacific, listed in both Singapore and the Philippines, said higher productivity in its cannery and lower commodity costs, especially in packaging, contributed to the higher gross margins.
Del Monte Pacific, listed in both Singapore and the Philippines, said higher productivity in its cannery and lower commodity costs, especially in packaging, contributed to the higher gross margins.PHOTO: BLOOMBERG

Its businesses in Asia, Middle East doing well, help fuel net profit of US$8.5m

Food and beverage company Del Monte Pacific was back in the black in the third quarter, due partly to its Asian and Middle Eastern businesses doing well.
 

Net profit came in at US$8.5 million (S$12.1 million) for the three months to Jan 31, against a net loss of US$4.8 million in the same period a year earlier.

Without one-off items, earnings rocketed 448.2 per cent to US$11.6 million, from US$2.1 million.

Turnover inched up 0.3 per cent to US$604 million as strong sales in Asia offset lower sales in the United States, it noted yesterday. The group is listed in both Singapore and the Philippines.

US unit Del Monte Foods contributed 74.6 per cent of the group's sales but turnover was down 3.4 per cent compared with the same period a year earlier, as weakness in the canned fruit industry persisted and supply-related issues hurt the sales of regional brands in the packaged vegetable category.

  • AT A GLANCE

    Q3 NET PROFIT: US$8.5 million (not applicable)

    Q3 REVENUE: US$604 million (+0.3%)

However, it still increased market share in two of the four major categories in retail - packaged vegetables and broth.

Sales in the Philippines grew as the group tapped growth and consumption opportunities during the Christmas peak consumption occasions, "positioning Del Monte as the single mega-brand that completes every Filipino family's traditional Christmas meal celebrations", said the firm.

Quarterly gross margins increased to 20.8 per cent from 19.8 per cent previously, on the back of higher productivity in the cannery and lower commodity costs, especially in packaging, said Del Monte Pacific.

Mr Joselito Campos Jr, Del Monte Pacific managing director and group chief executive, said: "Our significantly higher profit was driven by strong sales in the Philippines and the Asian markets of our S&W brand, as well as operational efficiency improvements resulting in cost reduction. We continue to build on the consumption-driven growth in Asia. Our US business continues to be impacted by shifting consumer preferences, and our performance in the food service and private label sectors."

He said the firm is implementing a strategy "based on innovation and differentiation in existing categories", and spotting opportunities in other categories and channels to address consumer demands.

Quarterly earnings per share was 0.44 US cent, from a loss per share of 0.25 US cent a year ago. Net asset value per share was 18.37 US cents as at Jan 31, compared with 17.55 US cents as at Jan 31 last year.

Del Monte Pacific shares closed half a cent lower at 34.5 cents yesterday, after the results were released.

A version of this article appeared in the print edition of The Straits Times on March 11, 2017, with the headline 'Del Monte Pacific back in the black on strong Q3 earnings'. Print Edition | Subscribe