CANNED-FOOD brand Del Monte Pacific on Tuesday (Sep 10) posted a net loss of US$34.2 million for the first fiscal quarter ended July, widening from its net loss of US$13.1 million in the corresponding year-ago period.
The loss was largely driven by unfavourable results from its US subsidiary, Del Monte Foods (DMFI), and interest expenses, said the company.
Its gross profit declined, going down 19.1 per cent to US$87.6 million, on the back of DMFI’s high cost of inventory and the impact of inflation on production in the prior year.
Loss per share stood at US$0.0176, down from US$0.0067 in Q1 FY2024.
The group’s Q1 revenue rose 3.9 per cent to US$536.9 million, from US$516.7 million. The company attributed the increase to higher exports of fresh and packaged pineapple products, and higher sales in the Philippines.
Its US subsidiary, DMFI, achieved sales of US$356.6 million, accounting for 66 per cent of the group’s turnover. DMFI’s sales were stable, as the expansion of the sale of its Joyba bubble tea and growth in its broth and stock portfolio were offset by a slowdown in sales of its healthy snacks.
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Excluding its US subsidiary, sales by the group for Q1 stood at US$180.4 million, 8.1 per cent higher than the US$166.9 million in sales in the corresponding quarter of the preceding year.
This was mainly driven by the strong growth in its international markets from higher sales of its premium S&W pineapples to Asia, Europe and the Middle East. Sales to the Philippines grew by 1.7 per cent.
Philippine sales of US$77.2 million were 6.5 per cent higher in peso terms, but 1.7 per cent higher in US dollar terms as a result of the depreciation of the peso. This was mainly driven by higher sales across key categories of packaged fruit, beverage and culinary, said the company.
Sales in its international markets grew by 14.7 per cent as a result of improved performances across all product categories, which include processed, fresh and frozen foods, and not-from-concentrate juices.
The group’s net debt, which includes its borrowings but excludes its cash and bank balances, amounted to US$2.2 billion as at Jul 31, 2024 – lower than the US$2.3 billion as at Apr 30; this lowering of net debt came from the decrease in inventory from DMFI and settlement of loans.
The group said that it expects to incur a net loss in FY2025, although it expects this to be lower than in FY2024.
It will continue to pursue plans for the selective sale of assets in the US and the injection of equity in the group through strategic partnerships to lower its leverage. It will also continue to actively restore gross margins, such as by reducing its inventory levels by 30 per cent.
However, the positive financial impact will be fully reflected only in FY2026, said the group.
Shares of Del Monte closed 1.1 per cent or S$0.001 lower at S$0.088 on Tuesday, before the results were announced.
