Del Monte Pacific turns profitable as sales pick up

Del Monte Pacific Ltd. reported a net income of $700,000 in the first quarter of its fiscal year ending 2018, reversing a net loss of $7 million a year ago.

This was the result of its strong Asian business, the company said.

In a disclosure to the Philippine Stock Exchange, DMPL said first quarter sales reached $473.8 million, higher by one percent on strong performance of S&W in Asia and the Middle East, which offset lower sales in the US.

The group’s US subsidiary, Del Monte Foods, contributed $336.5 million or 71 percent of group sales.

However, DMFI’s sales declined four 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.

On the other hand, DMFI expanded the adult fruit cup snacking segment with the launch of new products.

“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,” DMPL said.

However, this was offset by the 14 percent growth in sales of the group’s second largest subsidiary, Del Monte Philippines Inc. (DMPI) to $131.4 million.

Sales in the Philippines, the largest market of DMPI, were up on the back of increased consumption of packaged pineapple fruit following improvement in supply, coupled with higher sales of culinary products.

Similarly, sales of the S&W business, the fastest growing business of DMPI in Asia and the Middle East, continued its strong performance achieving double digit growth, mainly due to strong sales of fresh pineapple on the back of improved supply and expansion into Turkey, a new market for packaged products.

DMPL said its business in Asia continued its strong momentum in the first quarter, driven by growth through S&W’s significant progress as it expanded its business in existing markets and broke ground in new markets.