Del Monte Pacific reclaims profitability on turnaround of US unit
Consumer giant Del Monte Pacific Ltd. (DMPL) turned profitable in the quarter ending July, driven by the turnaround of its US subsidiary and the sustained profitability of the Philippine business.
DMPL delivered a net profit of $18.3 million in the first quarter of its fiscal year 2022, reversing the $3.2-million loss in the same period last year, the company disclosed to the Philippine Stock Exchange on Friday.
US subsidiary Del Monte Foods Inc. (DMFI) posted a quarterly net profit of $4.8 million versus a net loss of $14.3 million in the same period last year, sustaining the turnaround that began in the previous fiscal year.
Del Monte PhiIippines Inc., the group’s most profitable unit, grew its net profit during the three-month period by 37 percent year-on-year to $25.6 million.
The group generated sales of $462.1 million in the first quarter, up by 12 percent year-on-year, driven by higher sales in the US and international markets. DMFI accounted for $298.1 million or 65 percent of group-wide sales, growing by 11 percent year-on-year. US branded retail and food service businesses grew by a combined 17 percent, while sales of low-margin private label products were reduced as planned. Improvement in supply and distribution gains led to higher volumes across major categories, primarily canned vegetables and fruits. “Del Monte Foods’ turnaround last year has set it on a path to higher profitability as our team executes against our strategy of increasing higher-margin branded sales and reducing noncore sales. Our fresh pineapple exports to Asian markets have also recovered and delivered growth through expansion in offline and online channels. These crucial initiatives are reflected in the strong results for the first quarter and we are confident of sustained execution going forward,” said Joselito Campos Jr., DMPL’s managing director and chief executive.
DMPL’s cash flow during the quarter, as measured by earnings before interest, taxes, depreciation and amortization stood at $75 million, up by 77 percent year-on-year.
