CAMPOS-LED fruit canner Del Monte Pacific Ltd. on Wednesday said it registered net income of $51.15 million (P2.4 billion) for the fiscal year ending in April 2016, reversing last year’s net loss on the back of strong sales and one-off gains.
In a disclosure to the Philippine Stock Exchange, the food and beverage conglomerate, which is both listed in the Philippines and Singapore, said the net income for the period was inclusive of one-off favorable adjustments after tax equivalent to $31.7 million (P1.48 billion) arising from amendments to the retirement plan of its US unit, Del Monte Foods Inc. (DMFI).
The group achieved full year sales of $2.3 billion, 4 percent higher than the previous year. Its US subsidiary, Del Monte Foods, which accounted for 78 percent of the conglomerate’s sales, generated revenue of $1.8 billion, 4 percent higher than the prior year.
Meanwhile, the Philippine market delivered a record performance for the full year with sales up 6 percent across all product categories such as packaged fruit, beverage and culinary.
The company incurred a net loss of $38 million (P1.7 billion) in the previous fiscal year mainly due to costs association with the acquisition of its US unit.
Operating income improved to $19.8 million (P928 million) versus the $43.2 million (P2.02 billion) net loss in the same period in 2014.
Net income for the fourth quarter alone stood at $19.2 million (P900 million), inclusive of a one-time net gain of $8.4 million (P393 million).
“During the past year, we continued to lay the foundation for future growth and this is reflected in the sales and financial performance of Del Monte Pacific in FY2016,” said Joselito Campos, Jr., managing director and chief executive officer of the company.
“We drove improvements in our cost structure and better aligned operations with our strategic direction to gain market share, increase margins and expand into adjacent categories as part of a long-range plan to grow sales and profits for the company in the years ahead,” he added.
For the period, DMFI increased its market share in the US canned vegetable and fruit segments despite industry contraction.
“Barring unforeseen circumstances, the Group will continue to be profitable in FY [fiscal year]2017. In the short- to mid-term, DMPL plans to improve its financial performance by strengthening its core business, leveraging procurement synergies and optimizing G&A [general and administrative]costs,” Del Monte told the local bourse.
Thus, the closure of its North Carolina plant was part of this streamlining effort, it said.
“In addition, the Group will shift to a leaner organization model in the US to drive channel growth and bring down costs in line with competition.”
DMPL produces food under two heritage brands – Del Monte and S&W – which originated in the United States in the 1890s as premium quality packaged fruit and vegetable products.
It has exclusive rights to use the Del Monte trademarks for packaged products in the United States, South America, the Philippines, the Indian subcontinent and Myanmar, while it also owns S&W globally except Australia and New Zealand. Its US subsidiary DMFI owns other trademarks such as Contadina, College Inn, Fruit Naturals, Orchard Select and SunFresh.