Del Monte incurs net loss, sales higher due to pandemic

Published September 24, 2020, 10:00 PM

by James A. Loyola

Del Monte Pacific Limited reported a net loss of US$3.2 million for the first quarter of its fiscal year 2021 ending July, lower than the net loss of US$38.3 million in the same period last year.

In a disclosure to the Philippine Stock Exchange, the firm said losses were lower since there were no one-off expenses in the first quarter this year.

Last year’s net loss included one-off expenses related to withholding taxes on a subsidiary’s payment of dividend amounting to US$39.6 million. On a recurring basis, the group reported a net profit of US$4.2 million in the first quarter last year.

“Given the seasonality of the business, the first quarter is historically the lowest quarter for the Group,” DMPL said.

The Group generated first quarter sales of US$413.1 million, higher by 10 percent versus prior year quarter mainly driven by increased US and Philippines sales.

“We are encouraged by the sustained sales momentum in the first quarter which is a testament to the strength of our brands and product portfolio, offering health and nutrition to consumers. We recognise our own frontliners in the company who ensure a continuous supply of products,” said DMPL Managing Director and CEO Joselito D Campos, Jr.

Sales in the USA were up 14 percent. Del Monte Foods, Inc (DMFI), the Group’s US subsidiary, accounting for 65 percent of Group revenues, delivered 11 percent higher sales of US$268.2 million with improved demand across almost all categories due to the coronavirus pandemic.

DMFI grew topline with its trusted, healthy, shelf-stable products. Consumers continued to prepare meals and snacks at home with DMFI’s vegetable, fruit, tomato and broth products.

Both retail and foodservice channels generated higher sales, with strong category momentum particularly in core centre store, although at a more moderate pace from the fourth quarter of fiscal year 2020 ending April.

In the Philippines, the domestic market continued its strong momentum with another quarter of robust performance. Sales rose 22 percent in US dollar terms and 18 percent in Peso terms.

Rapid growth was seen across all categories, especially flagship Del Monte brands of spaghetti sauce, meal mixes and Pineapple Juice.

The relevance of these iconic Del Monte brands was magnified in a pandemic environment where consumers turned to healthy food and cooked more meals at home with the company’s culinary products. Growth was sustained even as the COVID lockdown ended in May.

Sales of the S&W branded business in Asia and the Middle East declined in the first quarter as higher sales of shelf-stable packaged products were offset by lower sales of fresh pineapples in China.