GLOBAL food and beverage company Del Monte Pacific Ltd. (DMPL) said its net loss in its fiscal first quarter (Q1) that ended July 31 had widened to $34.2 million, from $13.1 million a year earlier, mainly due to unfavorable results from its US subsidiary, Del Monte Foods Inc. (DMFI), and higher interest expenses.
DMPL Chief Operating Officer (COO) Luis Alejandro, however, noted that first-quarter margins “have increased against the fourth quarter, resulting in lower first-quarter losses than the fourth quarter.”
In the fourth quarter of the previous fiscal year, DMPL had posted a net loss of $78.6 million.
Sales for the three months to July 2024 rose 4 percent to $536.9 million from $516.7 million last year, but gross profit fell 19 percent to $87.6 million “due to DMFI’s high cost of inventory and inflationary impact from prior year’s production.”
On the other hand, subsidiary Del Monte Philippines Inc. (DMPI) achieved 13 percent higher sales in peso terms as international sales surged 20 percent on the strong performance of its packaged and fresh pineapple exports and stronger domestic sales.
DMPI increased its net profit in the first quarter by 52 percent, “marking the start of a turnaround.”
“We are optimistic that the group’s performance will continue to improve, paring losses on track for a group turnaround in FY2026 (fiscal year ending April 2026), with DMPI leading the way as it bounces back in FY2025,” Alejandro said.
The improved performance “is most evident in Del Monte Philippines where profitability has significantly increased,” the COO said.
DMPI was said to have maintained market leadership across core categories, with notable increases in canned fruits behind strong sales of its mixed fruit brand, Today’s.
Looking ahead, Alejandro said the company was “executing the priorities we have set to improve our operating and financial performance across all businesses.”
These include the selective sale of assets in the US and injection of equity in the group through strategic partnerships.
DMPL also aims to restore its gross margin by reducing 30 percent of inventory via production cutbacks, consolidation of manufacturing footprint, reduction of warehousing and distribution costs, and decreasing waste and inventory write-offs.
Under current conditions and barring unforeseen circumstances, DMPL said it still expected to incur a net loss in FY2025.
DMPL shares dropped 4 centavos, or 1.02 percent, to close at P3.88 apiece on Wednesday amid a 0.57-percent drop for the benchmark Philippine Stock Exchange index.
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