Del Monte Pacific Limited said Wednesday net income in the second quarter of its fiscal year dropped 57.8 percent to $21.02 million from $47.75 million recorded in the same period last year, on lower US sales.
Del Monte said in a disclosure to the stock exchange the group achieved sales of $636.2 million in August to October, down 4.6 percent from a year ago, as the strong performance in the Philippines under the Del Monte brand and the rest of Asia under the S&W brand failed to offset lower sales in the US. Del Monte’s second quarter covers the months of August to October.
“The excellent results in the Philippines and the S&W Asian markets, where our teams delivered on both sales expansion and productivity improvement resulting in cost reduction, underscore our strategy to tap into consumption driven growth in Asia which is fueled by an emerging middle class while, at the same time, seeking to create efficiencies throughout our operations,” Del Monte managing director and group chief executive Joselito Campos Jr. said.
“Our US business has been impacted by shifting consumer preferences, spending priorities and our performance in the foodservice sector. The demand for convenient packaged foods remains strong and our aim is to increase our market share by doubling our efforts on innovation and new product development,” he said.
US subsidiary Del Monte Foods Inc. contributed $493.3 million or 77.5 percent of group sales.
The Philippine market sustained its strong performance, with sales growing in double-digit terms, driven by expanded penetration and increased consumption across categories in retail, as well as expansion in the rapidly growing foodservice channel
The company’s second-quarter performance pushed the first-half net income to $11.4 million, down by 69.1 percent from $37.07 million recorded in the same period a year ago.
The company said barring unforeseen circumstances, it expected to remain profitable for the fiscal year 2017.
It said as a part of the group’s deleveraging, the fruit grower planned to issue early next year US dollar denominated perpetual preference shares in the Philippine capital market, to be listed on the Philippine Stock Exchange.