Del Monte posts $42M in 9-mo profit

Campos family-led food producer Del Monte Pacific Ltd. (DMPL) swung to profitability in the nine-month period ending January 2016, reversing the loss in the same period a year ago, aided by higher sales and some one-time items.

The group posted a net income of $41.9 million in the first nine months of its fiscal year, a turnaround from the $23.9-million loss in the previous year. There was a favorable adjustment of $23.4 million mainly due to the amendment of the retirement plan for employees of its US subsidiary.

“Barring unforeseen circumstances, the group will report a profit for the full year, a significant turnaround from the loss position last year,” DMPL said in a disclosure to the Philippine Stock Exchange yesterday.

DMPL reported nine-month sales of $1.7 billion, up 6 percent from year-ago level. Its US subsidiary, Del Monte Foods Inc. (DMFI), which accounted for 80 percent of group sales, generated revenue of $1.4 billion, 8 percent better than the year-ago level.

The Philippine market delivered a good performance in the nine-month period with sales up 7 percent, driven by expanded penetration and increased consumption for its juices, tomato-based sauces and packaged pineapple products.

In the meantime, sales of the S&W branded business in Asia and the Middle East grew by 16 percent on higher sales from both the fresh and packaged segments, partly offset by lower nonbranded exports.

The group’s gross margin in the nine months improved to 21.4 percent, up from the 18.9 percent margin in the same period last year. The group launched initiatives to mitigate the impact of lower pineapple output due to El Niño, particularly in the first half.