Del Monte Pacific swings to profit with $18 million

LISTED Del Monte Pacific Ltd. reported an $18.3-million profit for the first quarter of its 2022 fiscal year, a reversal of the $3.2-million loss incurred in the same period last year.

In an e-mailed statement on Thursday, the company said its sales for its first quarter ending July went up by 12% year on year to $462.1 million from $413.1 million.

“We will continue to grow revenues through an innovative product portfolio, more product availability from better distribution and expanded sales channels including e-commerce,” said Joselito D. Campos, Jr., managing director and chief executive officer of Del Monte Pacific.

Del Monte Foods, Inc.’s net profit amounted to $4.8 million, swinging form a $14.3-million loss incurred in the same period last year. It made up 65% of the group’s sales with $298.1 million.

The product offerings launched in the past three years accounted for 4.8% of Del Monte Foods’s first-quarter sales. Its recently launched products include Del Monte Fruit Infusions and Joyoba Bubble Tea, as well as Del Monte Veggieful Riced Veggies for its frozen foods segment.

“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 non-core sales,” Mr. Campos said.

Meanwhile, Del Monte Pacific’s “second largest and most profitable subsidiary,” Del Monte Philippines, Inc. (DMPI) saw its profits surge by 37% to $25.6 million as sales went up by 20% year on year to $176 million, benefitting from a reduced corporate tax rate.

Majority of DMPI’s sales were recorded in the Philippines reaching $92.1 million, “2% higher in US dollar terms but 2% lower in peso terms” but is 16% higher than its sales in the first quarter two years ago. Despite seeing an uptick in its convenience and dessert segment, a slowdown in its health beverages and snacks segment offset the growth.

However, DMPI’s international sales also rose by 40% to $67.8 million driven by packaged fruit and beverages, as well as premium packaged pineapple in the United States and S&W packaged products in Asia.

“Our fresh pineapple exports to Asian markets have also recovered and delivered growth through expansion in offline and online channels,” said Mr. Campos.

Del Monte Pacific deferred the initial public offering (IPO) of DMPI amid market volatility due to the country’s coronavirus disease 2019 (COVID-19) situation. The IPO had aimed to raise around P44 billion. For the meantime, DMPI plans to focus on product expansion.

In August, DMPI launched a joint venture (JV) with Vietnam Dairy Products JSC (Vinamilk) to allow its entry into the dairy market in the Philippines.

“The JV will import products from Vietnam, and market them under a co-branded label through DMPI, leveraging the trust and affinity built for the Del Monte brand among Filipino consumers, as well as DMPI’s extensive distribution network and long-standing relationships with leading retailers and distributors throughout the country,” Del Monte Pacific said. 

The company believes it is “well-positioned” to continue the momentum it achieved in the previous fiscal year. Del Monte Pacific reversed its losses to generate $63.3 million in profits for its fiscal year ending April, swinging from an $81.4-million loss incurred the previous year.

The company expects to generate a higher net profit for this fiscal year.

“In an environment with increased emphasis on health and wellness, [Del Monte Pacific] is well-positioned to respond to consumer needs, given our nutritious, long shelf-life products which enable consumers to prepare meals at home and build their immunity,” Mr. Campos said.

On Thursday, Del Monte Pacific shares at the stock exchange declined by 1.47% or 20 centavos to close at P13.42 each. — Keren Concepcion G. Valmonte

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