DEL MONTE Pacific Ltd. (DMPL) is looking to distribute its products via both conventional and digital channels, a company official said.
“The group will continue to improve and expand its offering of high-quality products, and make these more readily available to consumers through traditional and digital channels including e-commerce, and through more convenient formats,” the company said in a statement on Friday.
“We remain relentless in pursuing initiatives that will generate sustainable sales and profit while proactively dealing with cost inflation,” DMPL Managing Director and Chief Executive Officer Joselito D. Campos, Jr. said.
As part of the company’s brand expansion, DMPL’s subsidiary Del Monte Foods, Inc. (DMFI) recently acquired the intellectual property of the Kitchen Basics brand.
DMFI paid $99 million to McCormick & Company, Inc. with the purchase including $17 million of inventory with market value of $25 million to $27 million.
“The acquisition is consistent with DMFI’s overall growth strategy as it focuses on innovation, renovation and customization of its iconic brand portfolio,” the company said.
DMPL said that it had started a number of cost-optimization initiatives. In the United States, it introduced distribution center consolidation and increased use of rail instead of trucks to save on fuel cost, while it introduced tin can packaging optimization in the Philippines.
On Friday, the group reported that it incurred a net loss of $30.52 million in the first quarter from an $18.32-million profit last year after booking a one-off redemption cost.
The one-off cost is from DMFI’s redemption of 11.87% senior secured notes worth $50 million “to secure a much lower interest rate.”
Without the said one-off cost, the group’s net profit climbed by 7.2% to $19.64 million in the first quarter from the previous year.
DMPL’s fiscal year starts in the month of May with the first quarter ending in July.
The group’s sales ended lower by 1.2% in the quarter to $456.6 million versus last year as the company booked lower sales in the Philippines.
Del Monte Philippines, Inc. (DMPI) recorded a 16.9% decrease in its net profit to $19.7 in peso terms after booking higher product and distribution costs due to inflation.
Meanwhile, it achieved an overall 3.6% increase in its sales to $168.5 in peso terms driven by sales of S&W processed and fresh pineapples.
Its sales in the Philippines, which accounts for about half of DMPI’s sales, was lower by 9.7% after it registered a decline in volume across its core categories amid a high inflationary environment.
“Packaged mixed fruits and beverage sales were down as consumers shifted priorities in the face of high food prices, and are spending more on necessities and products offering improved value,” DMPL said.
“Barring unforeseen circumstances, the group expects to generate a net profit in [2]023 after one-off redemption expenses,” the company said.
DMPL closed unchanged on Friday at P14.00 apiece. — Justine Irish D. Tabile
