MANILA, Philippines - A US acquisition made earlier this year continued to take its toll on food processing giant Del Monte Pacific Ltd. (DMPL) as it booked a net loss in the first half of its current fiscal year.
In a disclosure to the local bourse, DMPL said it incurred a net loss of $21.7 million in the May to October period (first half of its 2015 financial year) primarily due to acquisition-related expenses in the first quarter.
The company, however, posted a net income of $200,000 in the second quarter following a $21.9-million net loss recorded in the first quarter.
DMPL said the group’s improved second quarter performance was driven by robust sales amounting to $548 million, of which $435.1 million came from Del Monte Foods Inc. (DMFI).
DMPL in February this year completed the acquisition of DMFI for nearly $1.7 billion, jumpstarting the transformation of the former into a global branded food and beverage firm.
“We are encouraged by the consumers’ response to our initiatives in the US and we expect to continue to gain market share in the coming quarters,” said Joselito Campos Jr., chief executive officer and managing director of DMPL.
Campos said the company’s branded business in Asia continued to broaden and deepen its market penetration.
DMPL said it branded business in Asia composed of Del Monte in the Philippines and the Indian subcontinent as well as S&W in Asia and the Middle East generated sales of $128.5 million in the second quarter, higher than the $120.6 million booked in the first quarter.
“We are committed to significantly deleverage DMPL’s balance sheet by reducing debt in the next quarter through an international perpetual preference share offering followed by a rights issue which are expected to raise $515 million,” Campos said.
DMPL earlier disclosed that it intends to conduct an international perpetual preference share offering to be listed on the Singapore Exchange.
The company has mandated DBS Bank Ltd. as sole global coordinator for the offering.
“In our main US market, the initiatives taken post-acquisition, which include reverting back to competitive pricing levels, reintroducing the well recognised classic Del Monte label and reinstating trade support levels, have led to increased market share across our key categories of packaged vegetable, fruit and tomato,” said Nils Lommerin, chief executive officer of DMFI.
DMPL is a company listed in both Singapore and the Philippines. Its 23,000-hectare plantation in Mindanao is considered as the world’s largest fully integrated pineapple operation with a 750,000-metric ton processing capacity.