The Campos family’s Del Monte Pacific Limited expects to deliver higher branded revenue growth in its fiscal year ending April 2024 (FY2024) even as it incurred a loss in the first nine months (May 2023 to January 2024) and plans to close two US plants to improve margins.

In a disclosure to the Philippine Stock Exchange (PSE), the firm said, “the Group anticipates that FY2024 and FY 2025 will be years during which the company focuses on reducing inventory and further lowering operating costs. DMPL expects to incur a loss in this financial year.”

Meanwhile, the firm said its US subsidiary Del Monte Foods Inc. will also close two vegetable plants in Wisconsin and Washington which will lower fixed costs and improve margins. 

DMFI will consolidate its green beans volume from Wisconsin into another plant. One off costs are estimated to be $11.2 million in FY2024. The consolidation will benefit DMFI in terms of lower costs and initial working capital savings in FY2025.

As DMFI’s branded portfolio continues to strengthen its position as a market leader across various categories, the group anticipates that its innovation and new business will make important contributions to both sales and margins. 

Furthermore, in response to the growing demand for premium products, particularly the superior MD2 fresh pineapple, plans have been developed to substantially increase production. 

This initiative will support the rising export demand for these highly sought-after products and further strengthen the Group’s reputation as a provider of exceptional quality.

The group incurred a net loss of $50.6 million versus the prior year period’s net profit of $28.8 million.

It generated sales of $1.8 billion for the nine months of FY2024, slightly lower by 0.3 percent versus the prior year period as higher sales in the US and higher exports of fresh pineapples were offset by lower export sales of processed pineapples products and local Philippine sales.

The group’s US subsidiary, Del Monte Foods Inc. (DMFI), achieved sales of $1.3 billion or 72 percent of group turnover. 

DMFI’s revenues were one percent higher versus prior year period due to pricing actions in FY2023 and in August this year, as well as incremental volume from USDA which were partly offset by lower sales from the non- strategic co-pack business and higher trade spends.

DMPL ex-DMFI generated sales of $528.7 million (inclusive of the $15.6 million sales in between DMPL and DMFI which were netted out during consolidation), 9.5 percent lower than the $584.3 million sales in the prior year period. 

This was mainly due to lower pineapple supply as explained above which drove lower exports of pineapples and other packaged products, as well as lower shipments to the US.

Philippine sales of $291.2 million were relatively flat (at 0.8 percent lower in peso terms and 0.6 percent lower in US dollar terms). 

Robust growth from e-commerce which almost doubled, and sustained growth from convenience and foodservice were offset by declines in modern trade and general trade business.

Exports of packaged pineapples and other products, and fresh pineapples sales declined by 35.5 percent and 1.5 percent, respectively driven by lower pineapple supply starting in the second quarter and reduced shipments to the US.

This was partly offset by increased sales of premium S&W Deluxe fresh pineapples and pricing action to offset inflation.