Del Monte Pacific swings to profitability, earns $63M

Listed Del Monte Pacific Ltd. (DMPL) reversed its $81.4-million loss last year as the company improved its sales mix and margins from lower sales of low-margin segments, lower trade promotions, and expenses.

The company achieved a “very commendable performance” with $63.3 million in profits for the year ended April 2021, Del Monte Pacific disclosed to the exchange on Thursday.

“Our team has worked exceptionally hard to bring the company to this strengthened base with lighter assets and a more competitive cost structure, while meeting consumers’ needs for high-quality nutritious products especially during this pandemic,” DMPL Managing Director and Chief Executive Officer Joselito D. Campos, Jr. said.

It also recorded a $14.5 million profit in the fourth quarter, a reversal of the $12.4-million loss it incurred in the same period last year. Profit-growth was achieved for the three-month period despite sales declining 22% to $497.8 million year on year from $638.4 million.

The “asset-light” strategy and other cost saving measures of Del Monte Foods, Inc. (DMFI) resulted in $40 million in savings. The company said it is on track in offsetting one-off expenses it incurred in plant closures the year before.

Meanwhile, sales went up by two percent to $2.2 billion due to improved sales in the Philippines and international markets. DMFI accounted for 70% of group sales, which amounted to $1.5 billion.

The company’s second-largest business unit, Del Monte Philippines, Inc. (DMPI), recorded its “best ever sales” at $705.8 million and a record profit of $94.5 million.

Nearly two-thirds of DMPI’s sales were made in the Philippines, which rose by 16% to $392.9 million. Retail sales offset the decline in food service sales.

DMPI has submitted a registration statement to the Philippine Securities and Exchange Commission for the initial public offering of its common shares.

“DMPL is well-positioned to build on the momentum achieved in fiscal year 2021 and expects to offset the impact of commodity and transportation headwinds,” the company said, adding that it expects to generate a higher net profit in 2022.

On Thursday, shares of Del Monte Pacific at the stock exchange went down by 4.59% or 74 centavos to close at P15.38 each. — Keren Concepcion G. Valmonte