LISTED Del Monte Pacific Ltd. (DMPL) widened its attributable net loss to $34.17 million for the first quarter (May-July) of its fiscal year 2025, ending in April, compared with a $13.08 million attributable net loss the prior year, due to “unfavorable results” from its United States business and higher interest expenses.
“DMPL reported a net loss… largely driven by unfavorable results from Del Monte Foods, Inc. (DMFI), and increased interest expenses,” DMPL said in a regulatory filing on Wednesday.
First-quarter gross profit dropped by 19% to $87.57 million on high inventory costs and inflationary impact from last year’s production. Interest expenses rose by 27.5% to $56.16 million on higher loans and interest rates.
DMPL grew its sales by 4% to $536.9 million from $516.73 million the previous year led by higher packaged and fresh pineapple exports and stronger domestic sales led by Philippine subsidiary Del Monte Philippines, Inc. (DMPI).
“First-quarter margins have increased against the fourth quarter, resulting in lower first-quarter losses than the fourth quarter. We are executing the priorities we have set to improve our operating and financial performance across all businesses. This is most evident in DMPI where profitability has significantly increased,” DMPL Chief Operating Officer Luis F. Alejandro said.
US subsidiary DMFI recorded a 0.1% increase in sales to $356.59 million on stronger Joyba bubble tea sales which offset lower sales in the healthy snacking category.
DMPI posted $77.2 million in sales, up by 2% and 6% in dollar and peso terms, respectively. The growth came from better performances of packaged fruit, beverage, and culinary.
Sales in international markets increased by 20% in peso terms due to better sales across processed, fresh, frozen and not from concentrated juice categories.
“Processed exports to Europe, Middle East, Africa, and Asia were higher, while increased fresh sales were led by higher volume in China, South Korea, and Japan, as well as favorable mix due to increased volume of the premium S&W Deluxe pineapple,” DMPL said.
The company’s net debt shrank by 3.2% to $2.23 billion from $2.3 billion on decreased inventory from DMFI and settlement of loans.
Meanwhile, DMPL said that plans are underway for the “selective sale” of US assets and equity infusion in the company via “strategic partnerships.”
“The group intends to utilize the proceeds from these transactions to lower leverage,” it added.
DMPL said it continues to “actively” restore gross margins, with DMFI prioritizing a 30% reduction in inventory levels via a production cutback during the current pack season, as well as the consolidation of manufacturing footprint to be finished in the third quarter.
The US business is also focusing on the reduction of warehousing and distribution costs, as well as waste and inventory write-offs.
“We are optimistic that the group’s performance will continue to improve, paring losses on track for a group turnaround in fiscal year 2026, with DMPI leading the way as it bounces back in fiscal year 2025,” Mr. Alejandro said.
On Wednesday, DMPL shares fell by 1.02% or four centavos to P3.88 apiece. — Revin Mikhael D. Ochave