DMPL prices $90-M notes

Published December 6, 2021, 3:44 PM

by James A. Loyola

Del Monte Pacific Limited (DMPL) has successfully priced its $90-million 3-year unrated Senior Notes with a fixed coupon rate of 3.75 percent, payable semi-annually.

In a disclosure to the Philippine Stock Exchange, the firm said the Notes were priced with a yield of 4.00 percent at a reoffer price of 99.30 percent.

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Credit Suisse acted as Sole Global Coordinator and Union Bank of the Philippines acted as Domestic Lead Manager. Approval in-principle has been received for the listing of the Notes on the Singapore Exchange Securities Trading Limited.

The transaction marks DMPL’s inaugural issuance in the international debt capital markets, establishing a new source of funding.

DMPL reported a net profit of $18.3 million the first quarter ending July of its fiscal year 2022, reversing the $3.2 million loss in the same period last year.

The group significantly improved its margins by 600 basis points to 28.9 percent from better sales of higher-margin branded products in the USA and lower costs.

“Del Monte Foods’ turnaround last year has set it on a path to higher profitability as our team executes against our strategy of increasing higher-margin branded sales and reducing non-core sales,” said DMPL Managing Director and CEO Joselito Campos, Jr.

He noted that, “Our fresh pineapple exports to Asian markets have also recovered and delivered growth through expansion in offline and online channels. These crucial initiatives are reflected in the strong results for the first quarter and we are confident of sustained execution going forward.”

“We will continue to grow revenues through an innovative product portfolio, more product availability from better distribution and expanded sales channels including e-commerce. In an environment with increased emphasis on health and wellness, DMPL is well-positioned to respond to consumer needs, given our nutritious, long shelf-life products which enable consumers to prepare meals at home and build their immunity,” added Campos.

DMPL said it 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 fiscal year 2022.

DMPL said it generated sales of $462.1 million, up 12 percent versus prior year period on higher sales in the USA and international markets.

The Group’s US subsidiary, Del Monte Foods Inc. (DMFI), generated sales of $298.1 million or about 65 percent of Group sales.

DMFI’s first quarter sales increased by 11 percent on strong branded retail and foodservice which grew by a combined 17 percent, while sales of low-margin private label were reduced as planned.

Improvement in supply and distribution gains led to higher volume across major categories primarily canned vegetables and fruits.

New products launched in the past three years contributed 4.8 percent to DMFI’s total sales in the first quarter.

 
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