Del Monte incurs $38-M net loss

MANILA, Philippines - Food processing giant Del Monte Pacific Ltd. (DMPL) incurred a net loss of $38 million in its fiscal year ending April due to acquisition-related and non-recurring expenses during the period.

However, DMPL said its group sales more than quadrupled to $2.2 billion following the acquisition of US-based Del Monte Foods Inc. (DMFI).

DMPL’s net debt also escalated more than 10 times to $1.7 billion from $143.8 million due to the DMFI purchase.

“The group expects to meet its financial obligations by increasing its operating cash flow and managing its interest rate risk by swapping variable with fixed interest rates. As we return to profitability this year, we will generate more free cash flow that will allow us to deleverage further,” the company said.

The Singapore and Philippine dual-listed company changed its financial year from the original month of December to align with its US subsidiary. Thus, reports are compared against calendar year 2013 to comply with regulatory requirement.

DMPL registered gross profit of $389.9 million for fiscal year 2015 versus $115.6 million for calendar year 2013 due to the consolidation of DMFI.

Moreover, the newly-acquired subsidiary generated almost 80 percent of total sales amounting to $1.7 billion while sales in the Philippines through Del Monte Philippines Inc. (DMPI) reached $303 million, six percent higher than the $286.7 million in 2013 on the back of higher sales on improved volume and better prices of all its product categories.

DMPI operates the world’s largest pineapple operations with a 23,000-hectare plantation and 700,000-ton processing capacity. DMPI also imported its products to the US-based subsidiary and are now in 750 ethnic retailers with a target to reach approximately 2,000 stores by the end of fiscal year 2016.

“The group sustained gains through continuous investments in consumption-building initiatives across categories that resulted in wider-base household penetration and more frequent usage for its key brands. Growth was demonstrated across all trade channels driven by deliberate distribution expansion and more impactful point-of-sale presence,” DMPL said.