Del Monte sees full-year profits

CAMPOS family-led food producer Del Monte Pacific Ltd. (DMPL) is seen on track with its goal to return to full-year profitability in fiscal year ending April 2016.

As part of the group’s plan to reduce debt stock, DMPL affirmed plans to issue $360 million worth of US dollar-denominated perpetual preference shares in the first half of 2016.

The company increased debt with the 2014 acquisition of the consumer food business of private-held American corporation Del Monte Foods (DMFI) for $1.675 billion, a deal which allowed the local firm to break into the US market and reunite with its US mother brand.

For the six months ending October – the first half of its fiscal year, DMPL generated a net income of $41.3 million, a turnaround from the comparative period’s loss of $21.7 million, the company disclosed to the Philippine Stock Exchange on Wednesday.

The group generated sales of $1.1 billion, up by 14 percent year-on-year during the six-month period versus the prior year period. DMFI generated $915.9 million or 81 percent of group sales.

For the quarter ending October, DMPL generated a net income of $53.3 million compared to a measly $0.2 million earnings in the same period last year. Excluding one-time adjustments, the group’s recurring net income would have been $18 million, still significantly higher than last year and a turnaround from two years of acquisition and transition-related losses since the acquisition of DMFI.

Sales for the second quarter amounted to $658.3 million, up by 20 percent over the prior year period. Sales from key branded business in the USA and the Philippines under the Del Monte brand as well as sales from the rest of Asia under the S&W brand delivered better performance.