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Del Monte Pacific back in the black for Q3 with US$2.6m profit

LOWER “one-off” expenses for its US subsidiary helped food and beverage company Del Monte Pacific deliver a third-quarter net profit of US$2.6 million, from a net loss of US$38.4 million for the year-ago period, the group said in a Singapore Exchange filing on Friday morning.

Loss per share (LPS) narrowed to 0.12 US cent, from a LPS of 2.2 US cents for the previous year. Taking into account preference dividends, earnings per share was 0.13 US cent for the quarter, compared to LPS of 1.97 US cents a year ago.

The group, which is listed here and in the Philippines, said that without “one-off” adjustments - for both years for its US subsidiary - for plant closures and tax changes, its recurring net income of US$3.0 million would have been lower than last year’s recurring net income of US$3.4 million.

In all, the group had sustained one-off expenses net of tax of US$0.5 million for the third quarter of fiscal 2019, as compared to US$41.8 million for fiscal year 2018, which was mainly due to written-off deferred tax assets as a result of a change in federal income tax rate from 35 per cent to 21 per cent.

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For the three months ended Jan 31, revenue dropped 11.8 per cent to US$528.7 million from the previous year.

This was primarily due to the divestiture of the Sager Creek vegetable business in September 2017, lower sales in the US, lower exports of processed pineapple items and lower pricing of pineapple juice concentrate.

Sales were also lower in the Philippines, mainly driven by operational issues and “distribution transition” in the general trade channel.

The group does not declare dividends based on first-quarter, third-quarter or nine-months results.

Del Monte expects to be profitable for its fiscal 2019, though it said it faces headwinds due to changes in consumer demographics and preferences, as well as Americans’ eating and shopping patterns and preferences.

It will “continue to optimise its cost structure and invest in a multi-year restructuring project for its operations and supply chain footprint to more efficiently support its commercial strategy”.

It added: “The group will continue to expand its existing branded business in Asia, through the Del Monte brand in the Philippines, where it is a dominant market leader.”

Its shares closed on Thursday at S$0.148.