Del Monte Pacific Limited (DMPL) reported a net profit of US$63.3 million for its fiscal year ending in April 2021 (FY2021), reversing the US$81.4 million loss suffered in the prior fiscal year.
In a disclosure to the Philippine Stock Exchange, DMPL said the higher earnings came after the group improved its sales mix and margins from lower sales of low-margin segments, lower trade promotions, costs and interest expense.
The group’s US subsidiary, Del Monte Foods Inc.’s (DMFI) asset-light strategy and other cost saving initiatives yielded about US$40 million savings in FY2021, on track to recouping the one-off expenses incurred in plant closures in the prior year.
The group generated sales of US$2.2 billion, up 2 percent versus prior year on higher sales in the Philippines and international markets, offsetting the planned withdrawal from non-core segments in the US.
DMFI generated US$1.5 billion or about 70 percent of Group sales. In the US, branded retail sales grew by 2.5 percent and e-commerce sales significantly increased, continuing the strong growth momentum.
Total sales were, however, lower by 3 percent due to its strategic planned exit from the non-branded retail segment.
The group’s second largest subsidiary, Del Monte PhiIippines, Inc. (DMPI), achieved its best ever sales of US$705.8 million, up 14 percent versus the prior year, and generated a record net profit of US$94.5 million, up 40 percent.
Close to two-thirds of DMPI’s sales are in the Philippines, with the balance in the international market.
Sales in the Philippines in FY2021 rose 16 percent to US$392.9 million, as strong retail sales more than offset the decline in food service sales.
International sales of S&W processed products rose 33 percent while other processed products, half of which were branded Del Monte, grew by 24percent with the increase in at-home consumption due to the pandemic.
Sales in the fresh segment grew by 6 percent. Coming from a weak first half, fresh sales recovered in the second half of the year, growing by 31 percent as logistics and retail restrictions in China and other North Asian markets eased, allowing the company to meet growing demand for premium fresh pineapples as key markets re-opened.
“Our team has worked exceptionally hard to bring the Company to this strengthened base with lighter assets and a more competitive cost structure, while meeting consumers’ needs for high-quality nutritious products especially during this pandemic,” said DMPL Managing Director and CEO Joselito Campos, Jr.
He added that, “Our US business has turned around and we look forward to sustaining profitability in the coming years for the Group as we continue to grow revenues through an innovative product portfolio, more product availability through better distribution and expanded sales channels including e-commerce.”
Campos said “DMPL is well-positioned to build on the momentum achieved in FY2021 and expects to offset the impact of commodity and transportation headwinds. Barring unforeseen circumstances, the Group expects to generate higher net profit in FY2022.”