Del Monte Philippines books P2.6-B profit

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DEL MONTE Philippines, Inc. (DMPI)’s net income was flat for its fiscal year ending April 2018, due to higher interest expenses amid a single-digit growth in sales.

In a statement issued Wednesday, the local unit of listed canned fruit manufacturer Del Monte Pacific Ltd. said it booked a net income of P2.6 billion, lower by P0.1 billion from the year before.

This came amid a 3.4% increase in sales to P27.6 billion for the year, two-thirds of which came from the Philippine market.

The latest annual performance indicates a compounded annual growth rate (CAGR) for the company’s sales of 7.9% from 2015, where it delivered P22 billion. For net income, CAGR stood at 31% since 2015’s net income of P1.1 billion.

“The company achieved this through improvement in gross profit from higher sales volume, margin increase from the Philippine market, higher mix of fresh pineapple sales under S&W, aided by the weak peso versus the US dollar, revaluation of biological assets, improving operational efficiency and cost management,” DMPI said.

Sales from the Philippine market alone grew 6.7% to P16.9 billion. The company attributed the increase to strong demand for food services, the sales of which accelerated by 15% to P3 billion.

“(The increase rode on) the rapid expansion of quick service restaurants and convenience stores as well as the company’s growth of its juice dispensers, meal partnerships, and customized products,” DMPI said.

Within the year, the company launched the Del Monte 100% Pineapple Juice in Tetra Pak, which is now its fastest growing segment. It also introduced the Del Monte Juice & Chews in bottles, and Del Monte Fit ‘n Right Active.

The growth from Philippine sales outpaced the 1.9% drop in export sales to P10.6 billion, due to an excess in supply in Thailand and Indonesia. Its exports included the S&W brand and private label. The company has been changing its sales mix, shifting to the growing branded business.

“The Company expanded its sales under S&W fresh and processed pineapple at a compounded annual growth rate of 28% to P3.7 billion in Asia and Middle East markets, while it reduced its private label and commodity business during this period,” DMPI said.

DMPI expects to see higher earnings for the fiscal year ending April 2019, banking on the growth of the local market. For the export market, the company aims to improve its performance with higher fresh pineapple sales under S&W, alongside increased export margins from pricing and more efficient operations.

The company earlier this month postponed its planned initial public offering of up to P17.55 billion, citing volatility in the market which may affect investor sentiment for the stock. The proposed issuance has already been approved by the Securities and Exchange Commission and the Philippine Stock Exchange. — Arra B. Francia