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Del Monte Pacific swings into the red with US$38.4m Q3 loss
FOOD and beverage company Del Monte Pacific on Thursday reversed into the red for the third quarter on one-off expenses related to its plant closures in the US, and the write-off of deferred tax assets.
For the three months ended Jan 31, 2018, the group incurred a net loss of US$38.4 million, compared to a net profit of US$8.5 million last year.
Loss per share came in at 2.20 US cents for the quarter, from an earnings per share of 0.44 US cent for fiscal 2017's third quarter.
This quarter's net loss included US$41.8 million of one-off expenses (net of tax), as Del Monte continued the shutdown of its tomato production facility in Plymouth, Indiana, and wrote off deferred tax assets.
In particular, the group's US subsidiary, Del Monte Foods, Inc (DMFI) wrote off US$39.8 million of deferred tax assets due to the change in the US Federal income tax rate from 35 per cent to 21 per cent.
Excluding one-off expenses, third-quarter net profit stood at US$3.4 million, from US$11.6 million in the previous year.
Additionally, sales for the quarter fell 0.7 per cent to US$599.8 million from last year, mainly due to a decline in the exports of its pineapple products.
In February, the mainboard-listed group announced a planned initial public offering of its subsidiary Del Monte Philippines Inc, on the Philippines Stock Exchange.
The proceeds of up to US$320 million will be used primarily for debt repayment and general corporate purposes, which will reduce the group's leverage, Del Monte said.
Barring unforeseen circumstances and excluding one-off expenses, the group is expected to be profitable for fiscal 2018, Del Monte added.