Del Monte Pacific earnings down in fiscal year 2023

MANILA  -Del Monte Pacific booked a net income of $16.9 million at the end of its fiscal year last April due to one-off costs related to efforts to drastically cut debt expenses and also as margins were hit by inflationary pressures.

“The global environment remains unstable with certain cost pressures and consumers becoming more cautious with their spending,” the company, which is listed in the Philippines and Singapore, said in a Philippine Stock Exchange filing.

“[Del Monte Pacific] will focus on working capital improvements in [full year] 2024, especially inventory reduction, to generate more cash flow and strengthen the balance sheet,” it said.

“Barring unforeseen circumstances, the group expects to generate a higher net profit in [full year] 2024,” it added.

Total sales last year grew 3 percent to $2.4 billion mainly on better revenues in the US and other international markets.

Gross profit, however, fell 2.5 percent to $607 million on higher expenses.

Del Monte Pacific also booked a $55.2-million non-recurring charge as it refinanced loans to lower borrowing costs.

“The group’s increase in sales and leading market share across core products is an impressive achievement amid a highly challenging inflationary environment. As with most food companies, our margins were under pressure and impacted the Group’s profitability,” Joselito Campos, Jr., Del Monte Pacific managing director and CEO, said in the filing.

“We are focused on widening our distribution and expanding our reach into other market segments. We are also paying extra attention to managing costs, minimizing waste by continuously improving processes, and leveraging technology to enhance efficiency and lower expenses. A major priority is to reduce leverage, strengthen our capital structure and bring down interest expense in the coming year,” he added.

For the coming year, the company revealed plans to widen distribution in the US via e-commerce and physical stores.

“International sales growth is expected in Mexico, South America, and Canada,” the company noted.

It also plans to boost fresh pineapple production given rising export demand, the filing showed.