Del Monte Pacific Q2 earnings up 63.8% to US$35.8 million

DEL Monte Pacific has reported earnings of US$35.8 million for the second quarter to October, 63.8 per cent higher year-on-year, as its United States unit more than doubled profits.

Revenue rose by 4 per cent to US$651 million, according to the regulatory filing it made to the Singapore Exchange, where the Philippines food and beverage manufacturer has a listing.

It improved gross profit margin by 180 basis points to 27.4 per cent, mainly from a better sales mix with increased sales of higher-margin retail branded products in the US.

Its US unit contributed US$477.5 million or 73 per cent of group turnover, with sales rising 7 per cent on strong branded retail sales and planned reduction in sales of low-margin private label. Net profit saw a 151 per cent jump to US$22.7 million.

Del Monte Pacific cut its gearing during the quarter. Net debt to Ebitda (earnings before interest, tax, depreciation and amortisation) improved to 4.3 times from 5.8 times last year and gearing to 2.3 times from 2.6 times equity.

Earnings per share for the quarter stood at US$0.0159, up from US$0.0087 a year ago.

Del Monte Pacific's sales for the half-year of financial year 2022 were up 7 per cent at US$1.1 billion, and net profit almost tripled to US$54.1 million, on higher US and international sales as well as a higher gross profit margin of 28 per cent.

Barring unforeseen circumstances, the group expects to generate higher net profit for FY2022 as it expects to offset the impact of higher commodity and transportation costs by maximising operational efficiencies and increasing higher-margin branded sales.

It also stated it will enhance and expand its offering of products and make these more readily available to consumers through traditional and digital channels, and through more convenient packaging formats.

"In the international market, the group is positioned to unlock market opportunities in China and further penetrate underserved markets, it added in the filing.

Its shares closed flat at S$0.38 on Wednesday, before the improved financial performance went public.