Del Monte Pacific lays down plan to cut debts by P10B
MANILA -Campos-led Del Monte Pacific Ltd. will launch a “strong debt reduction program” over the next year as it aims to cut obligations by nearly P10 billion amid global recession concerns.
The listed canned fruit and condiment giant outlined plans to cut total debts in 2024 by about $170 million to $2.1 billion from $2.27 billion, a presentation to shareholders during its annual meeting showed.
Moreover, Del Monte Pacific is considering a potential share sale or issuance of other equity instruments to increase its capital.
This will improve its balance sheet metrics measuring its debt load. Specifically, Del Monte said the goal was to bring down its debt to equity ratio to “below three times in the mid-term.”
“The global environment remains unstable with certain cost pressures and consumers becoming more cautious with their spending,” Del Monte said.
Rising costs and interest expenses would also impact earnings in the early part of its 2024 fiscal year.
Article continues after this advertisementDel Monte Pacific’s debts over the past year swelled by $706 million as of April 2023, partly as it redeemed preferred shares and refinanced other loan obligations, based on the presentation to shareholders.
Article continues after this advertisementDespite challenges, the company expects net income to rise in 2024 while anticipating better sales in markets such as Mexico, South America and Canada.
Del Monte Pacific said net income during its 2023 fiscal year fell 83 percent to $16.9 million due to one-off costs.
READ: Del Monte Pacific earnings down in fiscal year 2023
Total sales last year grew 3 percent to $2.4 billion mainly on better revenues in the United States 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 nonrecurring charge as it refinanced loans to lower borrowing costs.
