Del Monte shares drop 8.72% on listing day
The value of the shares of food and beverage producer and retailer Del Monte Pacific Ltd. dropped by 8.72 percent Monday, as the company listed by way of introduction on the Philippine Stock Exchange.
Del Monte shares closed at P27.20 each against the listing price of P27.80, which was derived from the previous-session closing price of shares listed on the Singapore Exchange Securities Trading Ltd.
Share prices hit a high of P30 each and a low of P26.55.
Del Monte Pacific, which listed 1.297 billion shares on Monday, is the first company to be traded on both the Philippine and Singapore equity platforms.
Because it listed by way of introduction, funds were not raised like in an initial public offering, although Del Monte Pacific now has the option to sell shares at the PSE. This route is seen as a less less risky way for a company to test the public’s interest for its stock.
Company officials, meanwhile, noted that Del Monte Pacific sees continued growth in its sales both here and abroad.
Profitability should also increase as the company continues to shift to higher-margin branded products as it did with the Del Monte brand, and more recently, through the S&W brand, which Del Monte Pacific acquired in 2007.
In 2007, branded foods accounted for almost 70 percent of its sales, which increased 8 percent last year to $459.7 million last year compared to 2011.
Of the amount, about 60 percent came from Del Monte while S&W accounted for 8 percent with the rest coming from nonbranded products like pineapple concentrates.
“Del Monte in the Philippines and India will continue to be drivers of growth,” Del Monte chief operating officer Luis Alejandro said yesterday after listing ceremonies.
But the fastest growth will be seen for S&W, mainly through sale of fresh pineapples and juice products.
“The biggest opportunity is S&W. We have barely started on this brand and we believe this brand can become as big as the Del Monte brand in the Philippines,” Alejandro said.
