Del Monte PH offers higher operating profit

Del Monte Philippines, Inc. (DMPI) generated sales of P7.4 billion in the first quarter ending July 2020, as reported in the company’s filing with the SEC. About two thirds of DMPI’s sales are in the Philippines and the rest in the international market.

Sales in the Philippines grew by a commendable 18% to P4.5 billion, up from P3.8 billion in the same period in 2019. Higher revenues demonstrate the strength of the Del Monte brand and solid fundamentals amid the current economic and health environment. This solid performance offsets lower international sales of P2.4 billion. As a result, DMPI’s total sales were in line with last year, a test of the company’s resilience. In July, international sales decelerated, better than the first two months, showing encouraging signs of restoring its growth path.

DMPI’s first quarter operating income increased 27% to P1.4 billion with higher sales and an improved sales mix in the Philippines, lower costs, better margins and controlled operating expenses. The company maintained its net profit at P0.9 billion, comparable to last year, standing firm amid the current health and economic situation.

The company improved sales in all categories in the Philippines: culinary, beverage and fruit, led by spaghetti sauce, Quick ‘n Easy meal mixes and pineapple juice.

Consumers turned to the Del Monte brand and cooked more meals at home with the company’s healthy culinary products, supported by Del Monte Kitchenomics meal prep. And with the brand’s 100% vitamin C-rich pineapple juice, they helped strengthen shoppers’ immunity.

The company’s performance in the Philippines was driven by retail channels, which increased 32%. This offsets the weak foodservice channel that shifted its focus to e-commerce and community delivery services, partially recovering declines caused by restaurant closings during shutdown.

DMPI has been operating in the Philippines for 94 years and is one of the market leaders in the categories of canned pineapple and mixed fruits, canned and ready-to-drink Tetra juices, tomato sauce and spaghetti sauce, under its iconic Del Monte brand. The company is one of the largest food and beverage companies in the Philippines. DMPI operates a 26,000 hectare integrated pineapple plantation in Bukidnon, one of the largest in the world.

The majority of DMPI’s international sales are generated by its S&W branded business in Asia and the Middle East. Sales declined in the first quarter as higher sales of non-perishable packaged goods were offset by lower sales of fresh pineapples in China. Fresh pineapples sold through the foodservice channel (restaurants, hotels, and airlines) were affected. With new sales in July recovering with a lower rate of decline, the company expects its new business to expand in the remainder of the year and improve its margins with cost management and operating efficiencies.

DMPI’s growth momentum, led by the Philippine market in the first quarter of its financial year, attests to its strong fundamentals as a food company backed by strong brand and reliable products, offering health and wellness to consumers . Del Monte Philippines is positioned to grow with its long-life, nutritious products that allow consumers to prepare more meals at home and eat.

Disclaimer
This article relates solely to the financial results of Del Monte Philippines, Inc. and does not reflect the financial position of Del Monte Pacific Ltd.

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