Listed fruit grower and canner Del Monte Pacific Ltd. registered a net loss of $38.3 million in the first quarter covering May to July, a reversal from a profit of $3 million year-on-year.
“Excluding one-off items, the Group would have posted a recurring net income of $4.1 million, a turnaround from the net loss of $3.7 million in the prior year quarter,” Del Monte disclosed to the Philippine Stock Exchange.
Del Monte reported a gross profit of $91.1 million during the period, up 17 percent on year, and much improved gross margin of 24.3 percent, up 6.5 percentage points “mainly due to increased prices in the USA and Philippines, higher sales of fresh pineapple, divestiture of the low-margin Sager Creek vegetable business and reduced sales of low-margin private label, thus improving sales mix.”
The group generated first quarter sales of $375.9 million, down 14 percent on year, mainly due to lower revenues in the US, partly offset by higher sales in the Philippines and the S&W business in Asia.
US unit Del Monte Foods Inc. contributed $241.4 million or 64 percent of the group’s sales. Sales declined 22 percent mainly due to the divested Sager Creek business and reduced sales of low-margin non-branded business.
The group reported earnings before interest, taxes, depreciation and appreciation of $36.6 million, significantly higher than the prior year quarter’s EBITDA of $18.8 million.
It said the first quarter’s EBITDA included $2.1 million of one-off expenses mainly related to severance and loss on partial disposal of assets of a plant in Crystal City, Texas. Without the one-off expenses related mainly to plant closures in the USA, Del Monte said the group’s recurring EBITDA would have been $38.7 million, also better than the prior year quarter’s recurring EBITDA of $27.3 million.
Recurring operating profit stood at $22.4 million, up 114 percent from $10.5 million on year.
Del Monte said gross margin significantly improved by 7.4 percentage points to 20.3 percent against the prior year quarter’s 12.9 percent.
“Del Monte continued to diversify beyond the canned goods aisle and introduced innovative products in the growing categories of refrigerated produce and frozen to cater to demand for health and wellness, snacking and convenience,” it said.