Del Monte incurs $69-M loss in 2019

Published March 12, 2020, 12:00 AM

by manilabulletin_admin


Del Monte Pacific Limited suffered a net loss of US$69 million for the first nine months ending January 2020 of its current fiscal year due to one-off expenses.

In a disclosure to the Philippine Stock Exchange, the firm said expenses amounting to US$96.4 million consisted of US$53.8 million from plant closures and sale in the US in the second quarter of FY2020, mostly non-cash expenses, and US$43.8 million for dividend tax.

The Group generated sales of US$1.5 billion for the first nine months of FY2020, 2 percent lower than prior year period, but gross margin improved by 210 basis points to 22.7 percent due to better volume and pricing.

Without one-off expenses, the Group generated a net profit of US$27.4 million, significantly higher by 315 percent from the same period in the previous fiscal year.

Last November, the Group announced the closure and sale of four plants in the USA. “The Asset-Light Strategy of DMFI has been a critical step in repositioning DMFI for the future,” it explained.

“Execution of this strategy and other cost saving initiatives should improve the Group’s EBITDA margin by an estimated 225–275 basis points (US$50 to $60 million) over 24 months starting from November 2019,” DMPL said.

In the third quarter of FY2020, the Group recognized cost savings of US$5 to $6 million which had a favorable impact on profitability.

A portion of these improved cost savings will be reinvested in the growth and expansion of DMFI’s iconic brands. DMFI is capitalizing on growing consumer desire for convenient, healthy and tasty plant-based foods.

“Ongoing transformational initiatives at DMFI are already showing a positive impact on third quarter results, with significant improvements in profitability as well as operational efficiencies,” said DMPL Managing Director and Chief Executive Officer Joselito D Campos Jr.

He added that, “We are encouraged that the expected cost savings are on track.”

DMPL said it will continue to monitor and mitigate any risks posed by COVID-19 on sales, particularly fresh pineapples in China.