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Del Monte Q2 profit slumps on acquisition expenses

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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.

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.

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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.

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