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Del Monte Pacific turns around to net profit in three months to Oct.; shares rise over 9%

DEL MONTE Pacific Ltd. (DMPL) said attributable net profit was $21.9 million in the three months to October, turning around from a year-earlier loss of $37.35 million, following improved sales in the Philippines and the US.

In a disclosure on Friday, the food manufacturer said its sales during the second quarter rose 12% year on year to $623.5 million due to better figures in the United States (US) and the Philippines.

The company’s fiscal year bands in April, and the three months to October represent its second quarter.

US subsidiary Del Monte Foods, Inc. (DMFI) posted sales growth of 13% to $446.7 million due to stronger demand in the branded retail segment during the pandemic.

In the Philippines, sales rose 10% in dollar terms and 4% in peso terms, led by pineapple juice, meal mixes, and ketchup.

“Retail sales grew by a strong 13% despite a weak economy and high unemployment resulting from the pandemic. However, this was offset by the food service business which remained soft notwithstanding improvements over the first quarter,” according to the disclosure.

The company said Del Monte Philippines, Inc. (DMPI) posted a net income of $23.6 million.

“The strength of our brands and our products sought by consumers in the US and the Philippines, and improving sales in other Asian markets were at the centre of the robust performance for the quarter,” DMPL Managing Director and Chief Executive Officer Joselito D. Campos, Jr. was quoted as saying.

“We are razor-focused on managing costs while our solid fundamentals as a staple food business with trusted brands, and high quality, healthy and shelf-stable products will continue to drive our growth,” he added.

For the first half of its fiscal year, the company said attributable net profit was $18.6 million, a turnaround from a year-earlier $75.6 million loss.

Sales oduring the half rose 11% year-on-year to $1.04 billion, with DMFI accounting for 69% of the total at $714.9 million.

“The Philippines also generated increased sales of 15% and 10% in dollar and peso terms, respectively,” it said.

In October, the company announced that DMPI raised $134 million from an issue of fixed-rate bonds.

The oversubscribed issue consisted of three-year bonds priced at 3.484% rate and five-year bonds at 3.7563%.

Proceeds were used to refinance at a funding lower cost over longer maturities.

The company said it expects to return to profitability in the 2021 fiscal year.

“DMPL is well-positioned in this environment given its nutritious and long shelf-life products which enable consumers to prepare healthy meals at home and build their immunity amidst the pandemic,” it said.

On Friday, Del Monte Pacific rose 9.62% or 61 centavos to P6.95. — Revin Mikhael D. Ochave

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