Del Monte posts higher net profit in 2012

MANILA, Philippines - Robust sales of branded products in Asia Pacific carried Del Monte Pacific Ltd. to a double-digit profit growth last year.

In a disclosure to the Singapore Stock Exchange, Del Monte said its sales climbed eight percent to a record $459.7 million while  its net profit jumped to $32.1 million.

“Our consumer business has performed solidly in line with our vision to be one of the fastest growing global branded food and beverage companies,” said Joselito D. Campos Jr., managing director and CEO of Del Monte.

“We are steering the company towards more branded sales to deliver higher margins and more sustainable profits.

The branded business, which is composed of Del Monte in the Philippines and the Indian subcontinent as well as S&W in Asia and the Middle East, grew its sales 17 percent last year.

The branded business accounted for 70 percent of group sales last year from 65 percent in 2011.

“Our experience in the export markets in 2012 compels us to reduce the contribution of volatile non-branded business segments,” Campos said.

The non-branded business, primarily through export sales, dropped 7.8 percent given weak demand in Europe and softer prices of pineapple juice concentrates.

For the Philippines, sales picked up 14 percent driven by major product categories in the beverage, culinary and processed fruit segments, Del Monte said.

The S&W branded business surged 53 percent to record $35.2 million in sales for the entire year.

Del Monte said higher sales of S&W branded processed products were driven by distribution expansion in China, Korea and Indonesia while turnover of S&W fresh fruit rose in Korea and the Middle East.

In the fourth quarter alone, turnover rose 3.5 percent to $159.5 million while net income grew 2.3 percent to $13.4 million.

The branded business climbed 12 percent, offsetting the 16.7-percent decline in the non-branded business as export sales dropped.

Del Monte expects better earnings from its branded business and higher revenue from better volume and sales mix in the Philippines and S&W markets.

“Strategically, the group is expanding its branded business by deepening penetration in existing markets through improved trade coverage, entry into new markets such as Myanmar, and shifting to higher-margin branded products,” Campos said.

Del Monte Pacific produces, markets and distributes food, beverages, and related products in the Asia-Pacific region and the Indian subcontinent, and has supply deals with Del Monte trademark owners and licensees around the world.

The NutriAsia Group of Campos owns a majority stake in Del Monte Pacific. NutriAsia leads the Philippine market for condiments, specialty sauces and cooking oil.

The 23,000-hectare plantation of Del Monte Pacific in Mindanao is the world’s largest fully integrated pineapple operation with a 700,000-metric-ton processing capacity.