Campos-led Del Monte Pacific Ltd. reported a net loss in the quarter ending July to $13.1 million from previous year’s $30.5 million on higher interest expense.
Its revenue stream, the company said, have been rising. “Our margins were under pressure with inflation while interest rates rose, affecting the group’s bottom line,” Joselito Campos Jr., DMPL managing director and CEO, said.
“We are determined to bring margins up in the second half of our fiscal year through a combination of price adjustment and cost reduction, including minimizing waste further by continuously improving processes, and leveraging technology to enhance efficiency and lower expenses. Reducing leverage and interest expense is a key imperative and we are exploring all options to strengthen our capital structure,” he said. Last year’s net loss included its US unit Del Monte Foods Inc.’s one-off refinancing cost of $71.9 million or $50.2 million net of tax and non-controlling interest.
DMPL generated sales of $516.7 million in the quarter, up 13 percent from last year with better sales in the USA and fresh pineapple exports.
It Philippines sales were higher in peso terms but flat in US dollar terms with the strengthening of the greenback. Del Monte Foods reported sales of $356.4 million or 69 percent of group turnover and 18 percent higher than last year.
This, it said, was driven by pricing actions and strong growth and development of the company’s branded product portfolio in both traditional and emerging channels.
The Philippine market, meanwhile, delivered sales of $75.9 million, 5 percent higher in peso terms but flat in US dollar terms due to the peso depreciation.
Sales from packaged fruit, beverage and culinary were higher, supported by communication campaigns and value-for-money offers amidst the inflationary environment.
Its gross profit declined 18 percent to $108.3 million and gross margin of 21 percent. Declines were driven by inflationary factors which had increased the group’s product costs. Del Monte Foods implemented a price increase in July and carried out a number of cost savings initiatives to restore margins, whose impact will be felt in subsequent quarters.
“The price increase implemented in the USA in July will also allow DMFI to offset inflation and improve gross margins in the second to fourth quarters of fiscal year 2024,” it said. Campos’s daughter Jeanette Beatrice Naughton had been elected as director of Del Monte Philippines Inc.
Naughton is vice president for strategic planning.
Naughton formerly held management positions at Google at their Mountain View, California headquarters. She has an MBA from the Sloan School of Management of the Massachusetts Institute of Technology and a BA Mathematics degree from Wellesley College.
