Del Monte FY2023 net profit squeezed by one-off items

Del Monte Pacific Ltd., the international food company listed in the Philippines and Singapore, said Tuesday net profit for its financial year that ended April 30 dropped to $16.9 million from $100.0 million in the previous year due to one-off costs.

Del Monte said one-off items totaled $55.2 million, with $50.2 million booked in the first quarter as the company refinanced a loan with long-term credit facility that has lower interest rates. 

Group sales increased by 3 percent to $2.4 billion on higher USA and international sales. However, gross profit and earnings before interest, taxes, depreciation and amortization declined by 2.5 percent to $607 million and by 6.2 percent to $329.7 million, respectively, due to higher cost.


Del Monte Food accounted for $1.73 billion, or about 72 percent of Group sales, higher by 5 percent on sustained growth across almost all categories, attributed to pricing adjustments to mitigate inflation, distribution gains for vegetable club and Joyba bubble tea, increased sales of fruit cups, as well as incremental sales of $35.1 million from Kitchen Basics. 

Del Monte generated a gross profit of $400.3 million, slightly higher versus last year’s $396.1 million as the company succeeded in offsetting record levels of inflation.

Philippine market sales were up 7 percent in peso terms, but down 4 percent in US dollar terms, on higher culinary, beverage and new product sales, while the international business delivered 11.5 percent higher sales on increased fresh and packaged product sales.

“The Group’s increase in sales and leading market share across core products is an impressive achievement amid a highly challenging inflationary environment. As with most food companies, our margins were under pressure and impacted the Group’s profitability,” said Joselito Campos, Jr., Del Monte managing director and chief executive officer. 

He said the focus now is widening the distribution network and expanding market segments. 

“We are also paying extra attention to managing costs, minimizing waste by continuously improving processes, and leveraging technology to enhance efficiency and lower expenses. A major priority is to reduce leverage, strengthen our capital structure and bring down interest expense in the coming year,” Campos said.

He said the global environment remains volatile due to cost pressures and cautious consumers. He added that the group will remain vigilant in managing its operating expenses which include packaging materials optimization; power and fuel initiatives; investments to improve efficiency, productivity and minimize wastage, and product bundling initiatives in distribution centers.

Meantime, Del Monte’s board approved a final dividend of 0.13 US cent ($0.0013) per share representing 15 percent of net profit for the latest full financial year.