Campos-led Del Monte Pacific Limited (DMPL) expects to incur a net loss in its fiscal year ending April 2025 after reporting a net loss of $56 million in the first half due to losses at its US subsidiary.
In a disclosure to the Philippine Stock Exchange (PSE), the firm said the losses of its US unit, Del Monte Foods Inc. (DMFI), were partly offset by the strong 78 percent net profit growth of its subsidiary, Del Monte Philippines Inc. (DMPI), to $40 million.
For the first half of its fiscal year, DMPL grew sales by four percent to $1.2 billion on 14 percent higher sales in DMPI, which offset the two percent decline in the US. However, gross profit declined by eight percent to $225.1 million on higher costs in the US.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased by 19 percent to $93 million, and the group generated a net loss of $56.3 million, compared to a net loss of $21.6 million in the prior year period.
DMPL said it will continue to accelerate the resurgence of domestic and international sales of DMPI, which is expected to perform better in fiscal year 2025 than the prior year.
Against this backdrop, DMPL Group COO and DMPI President and COO Luis Alejandro said, “we are encouraged by the robust performance of Del Monte Philippines, which reflects our effective strategies and market engagement.”
“However, we acknowledge the challenges faced by our U.S. business and are committed to addressing these issues. Our unwavering focus remains on executing our strategic priorities to enhance operational efficiency and financial results across all subsidiaries,” Alejandro said.
For the second quarter of fiscal year 2025, DMPL generated sales of $694 million, up four percent on strong growth of 43 percent for fresh and packaged pineapple exports, as well as higher sales of six percent in the Philippines. This offset the three percent decline in the US.
DMPL incurred a net loss of $22 million from higher costs in DMFI, coupled with increased interest expense. This offset the outstanding performance of DMPI, whose net profit surged 98 percent to $20.3 million.
The Philippine market delivered sales of $113.5 million, growing by five percent in US dollar terms and six percent in peso terms, fueled by robust growth in beverage and packaged fruit.
The growth in beverage was anchored on the 100 percent pineapple juice functional portfolio, with impactful brand campaigns that stimulated consumption. These strategic initiatives drove a significant three-percentage-point market share gain, with Del Monte outperforming category growth. New beverage product introductions further strengthened the brand’s market share gains in the ready-to-drink juice segment.
The packaged fruit segment achieved substantial growth, driven by regional fiesta activations promoting fruit salad usage.
Sales in the international markets performed strongly, with sales up 43 percent, driven by higher fresh pineapple and processed product sales.
Robust sales of fresh pineapple were led by higher volume in China, South Korea, and Japan, favorable pricing, as well as better mix due to increased volume of the premium S&W Deluxe Pineapple.
Processed exports volume to Europe, the Middle East, and Asia were also higher, coupled with favorable pricing.
DMFI generated sales of $480.3 million, or 69 percent of group turnover. DMFI’s sales decreased by three percent, driven by changing sales mix and delayed timing of holiday shipments.
Del Monte’s foodservice channel, e-commerce business, and Latin America business posted the most growth in the second quarter.
DMPL reported a net loss of $22.2 million, compared to the prior year’s net loss of $8.5 million, due to unfavorable results from DMFI. DMFI’s net loss increased to $27.0 million from $3.5 million due to the continued impact of excess inventory, unfavorable operating costs, and increased interest expenses.