Del Monte Pacific Ltd. (DMPL) shed $81.4 million in its fiscal year 2020 due to the closures and sale of its production plants in the United States.
In a regulatory filing on Friday, the listed canned food manufacturer noted that one-off expenses worth $113.6 million dragged its earnings down to a loss. These include a $59.9-million expenses from the closures and sale of its US facilities and a $47.1-million tax incurred from issuing dividends.
The loss came despite a 9% increase in sales to $2.1 billion in the year ending April.
Its US subsidiary Del Monte Fruits, Inc. (DMFI) posted an 8% growth in sales to $1.5 billion, making up 72% of its parent’s sales, driven by high demand for all its products. New products launched in the year also added to this growth, forming 5.1% of its retail and foodservice sales.
Del Monte Philippines, Inc. (DMPI) saw a sales uptick by 6.6% and 10.1% in peso and US dollar terms, respectively, due to a series of price increases and lower trade promotion spend. Its general trade segment, which forms half of the sales, expanded by 9%.
The unit’s S&W brand booked a 9% sales growth resulting from higher sales of packaged and mixed fruits in Asia, the Middle East, and America, as well as fresh pineapples in North Asia.
Meanwhile, in its fourth-quarter profit report, DMPL, which is listed in Singapore and the Philippines, posted a net loss of $12.4 million due to a $17.2-million expense relating to its US’s unit loan retirement and plant closures. Sans the one-off expenses, it could have earned $4.8 million.
The company, however, saw its sales grow by almost a half to $638.4 million in the February-April period.
DMFI posted a 65% jump in sales to $500.4 million, as customers shopped for more grocery items while staying at home amid an ongoing coronavirus pandemic.
Its Philippine subsidiary saw sales rise by 15% and 18% in peso and US dollar terms, respectively, resulting from its expanded retail channels as it gained market share across all product categories in April over the same month a year ago.
Its foodservice business shifted to e-commerce and community delivery services as it tries to recoup from sales declines caused by store closures during the lockdown months.
“This new focus will create the foundation for a future increasingly reliant on e-commerce,” the company claimed.
Demand surged for its flagship brands: 100% pineapple Juice, spaghetti sauce, and tomato sauce, as consumers became more concerned about their health and shifted to home cooking amid the pandemic, it noted.
Further, its S&W brand posted a slump in fourth-quarter sales as demand for its fresh pineapples in China did not offset the higher sales of its shelf-stable packaged products, like pineapples, beans, corn, and juices sold around Asia and the Middle East.
Del Monte is expecting a return to profitability in its next fiscal year. Presently, it intends to sustain product demand by optimizing its production facilities while enforcing strict safety protocols as it operates amid a health crisis.
Shares in Del Monte soared 27.5% to close at P5.10 each on Friday. — Adam J. Ang