Del Monte cuts net loss by 91% on better sales, non-recurring expenses

DEL MONTE Pacific Ltd. posted an attributable net loss of $3.25 million in the three months ending July, lower by 91% from last year’s $38.26-million loss, due to improved sales this year and expenses that were not carried over from last year.

The canned fruits manufacturer disclosed its first quarter results on Thursday, showing a 10% growth in gross revenues to $413.06 million. The company’s fiscal year begins in May, and the results reported reflect its performance from May to July 2020.

Aside from the improved sales, the company’s bottomline was lower year-on-year because of last year’s $39.6-million one-time expenses. These are related to the withholding taxes on Del Monte Philippines, Inc.’s payment of dividend to the parent company.

Del Monte said the coronavirus pandemic brought positive results for its business, as consumers showed increased demand for healthy products to combat the health crisis.

United States subsidiary Del Monte Foods, Inc. (DMFI) recorded an 11% sales growth to $268.2 million. When people were stuck at home due to the lockdown, consumers prepared their own food and bought up Del Monte’s vegetable, fruit, tomato, and broth products as ingredients.

In the Philippines, sales likewise grew 22% in dollar terms, lifted by increased volume, improved sales mix and better foreign exchange rates. Meal mixes, spaghetti sauce, and pineapple juice were the most prominent products as people heeded its supposed health benefits.

The company’s presence in other parts of the world similarly generated improved results. Gross profit in Asia Pacific grew 8% to $44.15 million, while Europe swung to a gross profit of $803,000 from last year’s loss of $1.04 million.

“We are encouraged by the sustained sales momentum in the first quarter, which is a testament to the strength of our brands and product portfolio, offering health and nutrition to consumers,” Del Monte Managing Director and CEO Joselito D Campos, Jr. said in a statement.

The company’s bottom line remains a loss, but Del Monte said this is due to the seasonality of its business, which usually makes the first quarter its lowest quarter of the year. Del Monte expects to return to profitability by the end of its fiscal year 2021. —