Del Monte swings to loss in 2nd quarter

DEL MONTE Pacific Ltd. swung to a loss of $37.35 million in the second quarter of its 2020 fiscal year because of one-off expenses as it shuttered a number of plants in the United States.

The listed canned fruits manufacturer told the stock exchange yesterday it booked an attributable net loss in the August to October period from last year’s profit of $8.43 million.

This accounted for the company’s one-off expenses in US subsidiary Del Monte Foods, Inc. (DMFI) which closed four production facilities to improve capacity utilization.

Minus the one-off items, Del Monte’s attributable net income in the second quarter soared 118.1% to $15.93 million, driven by the 64.7% jump in its operating profit to $47.22 million.

In the six-month period, the company’s attributable net loss reached $75.62 million from last year’s attributable net income of $11.45 million. Without the one-off items, attributable net income stood at $20.07 million, an almost six-fold increase from $3.57 million in the year prior.

Revenues during the period slipped 5.9% to $934.61 million as the slowdown in its US operations weighed on the improved performance in the Philippines and S&W in Asia.

The company said moving forward, it expects to “improve operational efficiency, reduce costs and increase margins” from the reevaluation of its US plants and the introduction of more health and wellness products.

“The plant restructuring in the US is a necessary step for us to remain competitive in a rapidly changing marketplace,” Del Monte Managing Director and Chief Executive Officer Joselito D. Campos, Jr. said in the statement.

“Ongoing transformational initiatives at DMFI are already showing a positive impact on FY2020 results, and DMFI is on track to exceed recurring EBITDA targets for this financial year. We are maintaining solid market share across legacy categories, while expanding into other new growth categories and channels,” he added.

The company previously said it is looking at options to refinance the loan facilities of DMFI valued at $442.5 million.

Shares in Del Monte at the stock exchange dipped 0.16 points or 3% to P5.17 each on Monday. —