Del Monte Pacific Limited reported a turnaround in the second quarter (August to October) of its fiscal year 2021 with a net income of US$21.9 million from a net loss of US$37.35 million in the same period last year.
In a disclosure to the Philippine Stock Exchange, the firm said earnings were higher because its US subsidiary Del Monte Foods Inc. did not have any one-off items this quarter.
Stripping out last year’s one-off expenses, the second quarter results remained strong with net profit surging by 37 percent due to higher sales, favorable sales mix and overall margin improvement in both US and Asian operations.
DMFI generated a net profit of US$9.1 million this quarter, a turnaround from quarters of losses in the past. The plant closures last year, in line with the company’s asset-light strategy, and other cost saving initiatives delivered incremental savings of US$10 million in the second quarter.
The Group’s second quarter sales of US$623.5 million were higher by 12 percent versus prior year quarter mainly driven by increased sales in the US and the Philippines.
DMFI generated 72 percent of Group revenues and achieved 13 percent higher sales of US$446.7 million with improved demand in the branded retail segment arising from the coronavirus pandemic.
Core categories of vegetable, fruit and broth delivered strong growth as consumers chose trusted, healthy and shelf-stable products.
Ecommerce sales, coming off a low base, were also up significantly despite tight supply which tempered full sales potential.
In the Philippines, sales improved by 10 percent in US dollar terms and 4 percent in peso terms, demonstrating the Company’s resilience during home quarantine.
Retail sales grew by a strong 13 percent despite a weak economy and high unemployment resulting from the pandemic. However, this was offset by the foodservice business which remained soft notwithstanding improvements over the first quarter.
The strong retail growth was in both modern trade and general trade, driven primarily by the beverage category and the culinary category.
Sales of S&W shelf-stable packaged pineapple products in Asia and the Middle East improved significantly by 34 percent over last year with robust sales of canned pineapples.
“The strength of our brands and our products sought by consumers in the US and the Philippines, and improving sales in other Asian markets were at the centre of the robust performance for the quarter,” said DMPL Managing Director and CEO Joselito D Campos, Jr.
He added that, “We are seeing the benefits from considerable cost savings achieved through the adoption of an asset-light model in the US along with greatly improving efficiencies which we have woven into our supply chain.”(James A. Loyola)