DUAL-LISTED fruit canner Del Monte Pacific Ltd. (DMPL) swung to a profit for the first quarter of its 2018 fiscal year on the back of the robust performance of its Asian businesses.
DMPL said it achieved a net income of $700,000 for its fiscal first quarter ending July, reversing the $7 million loss recorded in the comparable May to July quarter last year.
Sales reached $473.8 million, higher by 1 percent from last year, driven by the strong performance of its Asian and Middle East businesses, which offset lower sales in the United States.
Its US unit Del Monte Foods, Inc. (DMFI) contributed 71 percent or $336.5 million of Group sales, it said.
“DMFI’s sales declined by 4 percent mainly due to reduced sales in private label and regional brands in foodservice as a result of competitive pricing. Sales of USDA fruit and pineapple concentrate were also impacted by lower pricing. The key retail segments of canned vegetable, canned fruit, and plastic fruit cup all grew sales and market share during the quarter, despite some category declines,” the company said in a disclosure to the Philippine Stock Exchange.
“The first quarter is seasonally DMFI’s weakest quarter, accounting for only 19 to 21 percent of full year sales. As such, the first quarter is generally the least profitable quarter for DMFI,” it added.
However, declines were offset by its Philippine unit Del Monte Philippines, Inc. (DMPI), which booked sales of $131.4 million, or 14 percent higher than last year driven by expanded penetration and increased consumption of packaged pineapple fruit following improvement in supply, coupled with higher sales of culinary products.
“The Group continued to invest in driving inclusion of Del Monte products in consumers’ weekly menu behind 360-degree campaigns across brands. Foodservice sales in the Philippines also continued to expand, riding on the rapid expansion of quick service restaurants and convenience stores with partnerships and menu creation with major accounts,” it said.
“In the US, we are responding to shifts in consumer demographics, tastes and shopping preferences through new product introductions, increasing our capability in e-commerce and realigning our marketing strategies with these changing consumer trends,” DMPL Chief Executive Officer and Managing Director Joselito Campos Jr. said.
“Our aim is to rationalize non-profitable businesses and to also focus on our joint efforts with Fresh Del Monte Produce, to develop new business opportunities that will provide consumers with more premium quality and healthy products,” he added.
DMPL is the first Philippine-based company to be listed on two stock exchanges and be approved by local regulators to sell dollar-denominated securities.