Del Monte swings to net loss in 9 months

March 21, 2024 | 12:00am

MANILA, Philippines —  Del Monte Pacific Ltd. (DMPL) expects to finish its fiscal year 2024 in the red as the company slipped to a net loss in the nine months ending January.

DMPL swung to a net loss of $50.6 million in the first nine months of its fiscal year 2024 from a net profit of $28.9 million in the same period the previous year due to lower operating results.

Gross profit declined by 26 percent year-on-year to $360.4 million on the back of inflationary and higher operating costs.

Sales, however, were maintained at $1.8 billion on stable US and Philippines sales.

US subsidiary Del Monte Foods Inc. (DMFI) continued to gain market share in canned vegetable, fruit and tomato, while Del Monte Philippines Inc. (DMPI) expanded its market share in packaged pineapple, mixed fruit, tomato and spaghetti sauces.

DMPL said it expects to incur a loss in this financial year, seeing it as a year during which the company focuses on reducing inventory and further lowering operating costs.

“We expect that consumer spending will continue to be affected by inflation and high living costs. The group is focused on navigating through these challenges,” DMPL managing director and CEO Joselito Campos Jr. said.

“Additionally, we will explore opportunities to enhance our capital structure, reduce leverage, and minimize interest expenses,” he said.

DMPL said DMFI will close two vegetable plants in Wisconsin and Washington to lower fixed costs and improve margins.

DMFI is also rightsizing its workforce to reduce the general and administrative cost of the business.

“The group recognizes the uncertainty in the global environment and is committed to effectively managing its operating expenses,” DMPL said.

To achieve this, DMPL said it is implementing various strategies such as optimizing packaging materials, implementing power and fuel initiatives, making investments to enhance efficiency, productivity and wastage minimization, as well as introducing product bundling initiatives in distribution centers.

“By actively pursuing these measures, the group aims to streamline operations, reduce costs, and ensure sustainable growth in an everchanging market,” it said.