Del Monte Q2 profit slumps on acquisition expenses

SINGAPORE mainboard and Philippine Stock Exchange dual-listed Del Monte Pacific Limited (DMPL) posted a Q2 net profit of US$185,000 on Monday, down from its US$8.9 million profit a year ago.

The net income was impacted by earlier announced acquisition-related expenses. The bottom line also reflected interest expense from a long-term loan to acquire Del Monte Foods, Inc (DMFI) and short-term bridge financing of DMPL, which will be refinanced with equity.

For the three months ended Oct 31, the group achieved turnover of US$548 million, of which DMFI generated US$435.1 million of sales.

Del Monte reported a loss of 0.01 US cent per share, compared to the 0.68 US cent earned per share last year.

In the second quarter, the group achieved Ebitda and net income of US$59.4 million and US$20.7 million, respectively, before acquisition-related and other non-recurring expenses of US$22.1 million at Ebitda level and US$20.5 million at the net income level. The Ebitda of US$59.4 million was more than double that of the first quarter given the seasonality of the business.

DMFI's and DMPL's consolidated bottom line was impacted by acquisition-related expenses amounting to US$20.5 million net of tax. Without DMFI, DMPL's gross profit declined to US$29.9 million, and gross margin decreased to 23.3 per cent from 26.2 per cent due to lower sales and higher costs.