Campos family-led food and beverage conglomerate Del Monte Pacific Ltd. (DMPL) incurred a net loss of $8.7 million in May to July, the first quarter of its 2017 fiscal year, in line with the seasonally weak first quarter of its US business.
In a disclosure to the Philippine Stock Exchange Friday, DMPL said it expected to be profitable for the full 2017 fiscal year.
The first quarter net loss, DMPL said, was lower than the prior year’s loss of $10.7 million. Without the $2.8 million one-off expenses, the group posted a recurring net loss of $5.9 million, versus last year’s $9 million. The group incurred $4.9 million in one-off restructuring expenses from the closure of DMFI’s North Carolina plant. As part of the restructuring, DMFI also completed an organizational realignment to create a “leaner and more agile” management structure.
The disclosure said US subsidiary Del Monte Foods Inc. (DMFI)’s first quarter usually account for only 19-21 percent of full-year sales, adding that DMFI historically incurs a loss in the first quarter while sales would peak in the second and third quarters, around Thanksgiving and Christmas.
“We continue to drive improvements in our cost structure and this is reflected in the higher Ebitda (earnings before interest, taxes, depreciation and amortization) performance of the group in the first quarter. Our ongoing restructuring and streamlining efforts will deliver significant savings this year and next,” said DMPL managing director and group chief executive officer Joselito Campos Jr. said.
“With the first quarter being seasonally the weakest quarter in the US, we expect improved profitability in the coming quarters. We continue to align operations with our strategic direction to strengthen the group’s core business, gain market share, increase margins and expand into adjacent categories as part of a long-range plan to grow our sales and profits in the years ahead,” he said.
The group hit first quarter sales of $465.5 million, 3 percent lower than last year due to lower sales in the US. DMFI, which accounted for 75 percent of group sales, generated revenue of $350.9 million.