Del Monte Pacific Limited reported a surge in sales during the first quarter of its fiscal year ending April 2020 as it benefitted from the change in consumer behavior amid the ongoing COVID-19 pandemic.
In a disclosure to the Philippine Stock Exchange, the firm said though that the Group incurred one-off expenses totaling $17.2 million in relation to plant closures in the US and loan retirement, resulting in a net loss of $12.4 million from a gain of $6.3 million in the same quarter last year.
Without one-off expenses, net profit would have been $4.8 million.
The Group generated fourth quarter (February to April 2020) sales of $638.4 million, 48 percent higher than the $432.61 million reported in the same quarter last year, mainly driven by the surge in US and Philippines sales.
Sales in the USA were up 65 percent at $500.4 million with US subsidiary Del Monte Foods, Inc. (DMFI) accounting for 78 percent of Group revenues due to consumers pantry-loading and staying at home amidst the coronavirus pandemic.
“Del Monte grew topline significantly given its trusted, healthy shelf-stable products. Most of DMFI’s sales were through retail, offsetting lower foodservice sales which are less than 5 percent of total revenues,” the firm said.
DMFI also saw higher sales of new products launched in the past two years.
In the Philippines, the domestic market further accelerated its strong performance in the fourth quarter, growing sales by 18 percent in US dollar terms and 15 percent in Peso terms.
Rapid growth was seen across all categories, most especially flagship Del Monte brands of 100 percent Pineapple Juice, Spaghetti Sauce and Tomato Sauce.
“The relevance of these iconic Del Monte brands was magnified in a pandemic environment where consumers became more concerned with health and shifted to home cooking,” DMPL said.
It added that, “Digital communications highlighted product quality and taste, health and immunity as well as meal preparation and planning, sustaining growth even as the lockdown eased.”
DMPL said strong performance in the Philippines was driven by retail channels which grew by 29 percent, resulting in Del Monte gaining market share across every product category in April versus the prior year period.
On the other hand, the foodservice channel, accounting for 15 percent of sales pre-COVID, had shifted its focus to e-commerce and community delivery services, partially recouping declines caused by restaurant closures during the lockdown.
“As foodservice rebuilds with the re-opening of malls, this new focus will create the foundation for a future increasingly reliant on e-commerce,” said DMPL.
Meanwhile, sales of the S&W branded business in Asia and the Middle East declined in the fourth quarter as higher sales of shelf-stable packaged products such as canned pineapples, beans, corn and juices were more than offset by lower sales of fresh pineapples in China. Fresh pineapples sold through the foodservice channel - restaurants, hotels and airlines - were significantly impacted as consumers stayed home. There had been some sales improvement in May and June, and the Group expects its fresh business to grow in the remainder of the year.