Del Monte Pacific incurs net loss on plant closures

Published December 26, 2019, 12:00 AM

by manilabulletin_admin


Del Monte Pacific Limited reported a net loss of US$37.4 million for the second quarter ending October 2019 of its fiscal year 2020 from a net profit of $8.4 million in the same period last year.

In a disclosure, the Group reported a gross profit of US$134.1 million, 13 percent higher than the prior year quarter, and improved gross margin by 270 basis points to 24 percent.

Del Monte said this is mainly due to higher Philippines and S&W fresh pineapple sales, and reduced sales of low-margin businesses in the United States.

However, this quarter’s EBITDA included US$76.8 million of one-off expenses, mostly non-cash charges, due to the four plant closures or sale in the USA.

Without one-off expenses, the Group’s EBITDA was US$69.5 million, 55 percent better than the prior year quarter while operating profit was US$47.2 million, up by 65 percent. Recurring net profit more than doubled to US$15.9 million.

The Group generated second quarter sales of US$558.7 million, which were marginally higher due to improved sales in the Philippines and S&W business in Asia partly offset by lower sales in the USA.

DMFI contributed US$396.2 million or 71 percent of Group sales. Sales declined by 5 percent mainly due to the divested low-margin Sager Creek business and reduced sales of low-margin non-branded businesses which DMFI is making a concerted effort to reduce and eliminate.

In the second quarter, the Philippines domestic market reversed its FY2019 decline, delivering 5 percent growth in peso terms and 9 percent in US dollar terms. Higher volume and sales were buoyed by a stronger peso driving growth.