DEL MONTE PACIFIC Limited (DMPL) swung to a net loss in the November to January period, as it felt the impact of new tax rates in the United States as well as the sale of its Arkansas-based vegetable business.
In a disclosure to the stock exchange on Thursday, the canned fruits manufacturer reported a net loss attributable to the parent of $38.369 million in the third quarter ending January, against an attributable profit of $8.53 million in the same period a year ago.
This includes a one-off expense of $39.8 million in deferred tax assets from DMPL’s US subsidiary, Del Monte Foods, Inc. (DMFI), as the US government changed federal income tax rates to 21% from 35%. The unit further wrote off $6.8 million for the third quarter, after closing its underperforming Sager Creek vegetable business.
Excluding one-off expenses, DMPL’s attributable profit would have stood at $3.42 million, 70% lower than the $11.64 million it generated during the same period a year ago.
Sales for the November to January period dipped by 0.7% to $599.8 million, pulled down by a decrease in processed pineapple exports and lower pineapple juice concentrate prices.
DMFI accounted for 75% of the group’s sales or $451.5 million, up 0.2% year on year. The company said it has been introducing new products to the US market, boosting the market share of canned vegetable and fruit, plastic fruit cups, and broths in the country.
“Our innovation and marketing initiatives, to build relevance through product differentiation, address consumer trends and expand distribution in key growth areas, especially in the United States are beginning to pay off,” DMPL Managing Director and Chief Executive Officer Joselito D. Campos, Jr. was quoted as saying in a statement.
Its local unit, Del Monte Philippines, Inc. (DMPI), meanwhile, generated $420 million in sales for the period, higher by 8% in peso terms and up by 2% in US dollar terms. The company attributed this growth to marketing initiatives that boosted consumption of its brands.
The exports business, which includes DMPL’s S&W brand, also grew for the period, as the company started exporting packaged products to Turkey and new packaging formats in North Asia.
DMPI recently announced that it will be conducting a P16.7-billion initial public offering within the year, primarily for debt repayment and general corporate purposes that will help reduce DMPL’s leverage.
“We also are focused on reducing our debt and on streamlining operations to become more competitive. Such measures are geared to work in tandem with revenue-enhancing initiatives to ensure a profitable and sustainable business in the long run,” Mr. Campos said.
For the nine-month period, the company recorded an attributable loss of $40.447 million, against an attributable profit of $21.459 million in the same period a year ago. The group’s revenues, meanwhile, slowed by 0.5% to $1.698 billion.
Shares in DMPL lost two centavos or 0.19% to finish at P10.48 apiece at the stock exchange on Thursday. — Arra B. Francia