Del Monte Pacific pares Q1 loss, enjoys significant Ebitda growth

Del Monte Pacific achieved a 6 per cent rise in sales to US$472.8 million for the three months to July 31.
Del Monte Pacific achieved a 6 per cent rise in sales to US$472.8 million for the three months to July 31. PHOTO: BLOOMBERG

SINGAPORE - Mainboard-listed Del Monte Pacific pared its net loss to US$12 million (S$17 million) from US$21.9 million in the first quarter.

The Philippines-based company achieved a 6 per cent rise in sales to US$472.8 million for the three months to July 31.

The group recorded significant growth in Ebitda - a measure of operating profit - of US$17.3 million and achieved a turnaround from an operating loss of US$12.1 million in the same period last year last year.

The net loss was attributed to a weak quarter from US subsidiary Del Monte Foods.

Traditionally, Del Monte Foods' first quarter is its weakest. There was also additional expenses from implementing the SAP system.

The El Niño weather pattern also caused reduced pineapple supply in the group's plantation in the Philippines leading to lower exports.

Del Monte Foods generated higher sales, achieved higher gross margin and recorded a higher gross profit, but due to seasonality it incurred a net loss for the quarter.

However, market share across core retail segments maintained their strength as Del Monte Foods further developed partnerships with key retailers through investments in effective marketing and innovation, said Del Monte Pacific in a statement.

"Our financial performance tends to be skewed towards the second half of our fiscal year when Del Monte is the brand of choice for festive occasions," said Del Monte Foods chief executive Nils Lommerin.

"As we continue to unlock the growth potential of our products, accelerate our penetration of the food service sector and ethnic Asian market as well as enter new vegetable segments, our results will improve further," he added.

Loss per share narrowed to 0.74 US cent from 1.69 US cents previously.

In the coming quarters,Del Monte Pacific said its US subsidiary will continue to deliver increasingly differentiated value, prioritise promotion in critical consumption windows and unlock growth potential in its core business in packaged vegetable, fruit, tomato and broth.

It will also accelerate foodservice growth and expand its retail portfolio through the Sager Creek specialty vegetable business, and continue to grow the ethnic Asian market.

The group will continue to expand its existing branded business in Asia, through the Del Monte brand in the Philippines, where it is the dominant market leader.