Del Monte Pacific in the black in Q2 2020

Singapore

DEL Monte Pacific reported a net profit of US$21.85 million for the second quarter ended Oct 31, 2020, reversing from a loss of US$37.35 million a year ago when its earnings were weighed down by one-off expenses.

Revenue rose nearly 12 per cent year-on-year to US$623.45 million, fuelled by higher sales in the US and the Philippines.

Earnings per share for the quarter worked out to 0.87 US cents, versus a loss per share of 2.18 US cents a year ago.

For the quarter under review, the group brought down its net debt from US$1.7 billion to US$1.5 billion, and reduced gearing to 2.6x from 3.6x equity a year ago on the back of lower loans arising from a stronger operating performance and increased shareholder's equity from a private equity firm investing in a 12 per cent stake in Del Monte Philippines last year.

For H1 FY2021, net profit clocked in at US$18.6 million - versus a net loss of US$75.62 million previously - while revenue grew nearly 11 per cent to US$1.04 billion.

"The strength of our brands and our products sought by consumers in the US and the Philippines, and improving sales in other Asian markets were at the centre of the robust performance for the quarter," said Del Monte's chief executive officer and managing director Joselito D Campos, Jr.

"In addition, we are seeing the benefits from considerable cost savings achieved through the adoption of an asset-light model in the US, along with greatly improving efficiencies which we have woven into our supply chain."

The group expects to return to profitability in FY21, barring unforeseen circumstances, it said.

Shares in Del Monte closed at 16.3 Singapore cents on Thursday, up 0.6 cent or 3.82 per cent.