DEL MONTE Pacific Ltd. (DMPL) is looking to distribute its products through conventional and digital channels, a company official said.
“The group will continue to improve and expand its offering of high-quality products and make them more easily accessible to consumers through traditional and digital channels, including e-commerce, and through more convenient formats,” said the company in a statement on Friday. .
“We remain relentless in pursuing initiatives that will drive sustainable sales and profits while proactively addressing cost inflation,” said DMPL Managing Director and CEO Joselito D. Campos, Jr. ..
As part of the company’s brand expansion, DMPL subsidiary Del Monte Foods, Inc. (DMFI) recently acquired the Kitchen Basics brand intellectual property.
DMFI paid McCormick & Company, Inc. $99 million with the purchase, including $17 million of inventory with a market value of $25–27 million.
“The acquisition is in line with DMFI’s overall growth strategy as it focuses on innovating, renovating and personalizing its portfolio of iconic brands,” the company said.
DMPL said it has launched a number of cost optimization initiatives. In the United States, it introduced consolidation of distribution centers and increased use of rail instead of trucks to save on fuel cost, while it introduced optimization of can packaging in the Phillippines.
On Friday, the group said it suffered a net loss of $30.52 million in the first quarter compared to a profit of $18.32 million last year after incurring a one-time buyout cost.
The one-time cost comes from DMFI buying back 11.87% senior secured notes worth $50 million “to secure a much lower interest rate.”
Without said one-time cost, the group’s net profit soared 7.2% to $19.64 million in the first quarter from a year earlier.
DMPL’s fiscal year begins in May and the first quarter ends in July.
Group sales ended down 1.2% in the quarter at $456.6 million from a year ago as the company reported lower sales in the Philippines.
Del Monte Philippines, Inc. (DMPI) reported a 16.9% decline in net profit to $19.7 in pesos after accounting for higher product and distribution costs due to inflation.
Meanwhile, it achieved an overall 3.6% increase in sales to $168.5 pesos, driven by sales of fresh and processed S&W pineapples.
Its sales in the Philippines, which account for about half of DMPI’s sales, fell 9.7% after registering lower volumes in its main categories in a highly inflationary environment.
“Sales of packaged mixed fruits and drinks have declined as consumers shift their priorities in the face of high food prices and spend more on necessities and products that offer better value,” DMPL said.
“Barring unforeseen circumstances, the group expects to generate a net profit in 023 after one-time redemption fee,” the company said.
DMPL closed unchanged on Friday at P14.00 apiece. — Justine Irish D. Tabile