Del Monte swings back into the black for Q4, declares final dividend of 1.2 US cent per share

CANNED-food brand D03 on Wednesday posted net profit of US$14.5 million for the fourth fiscal quarter ended April, reversing from a net loss of US$12.4 million in the corresponding quarter last year.

This pushed the company's net profit for the full year up to US$63.3 million, turning around from a net loss of US$81.4 million in FY 2020.

Earnings per share for the quarter stood at 0.49 US cent, compared to a loss per share of 0.89 US cent last year.

Del Monte's board of directors have approved a final dividend of 1.2 US cent per ordinary share for FY 2021, representing 37 per cent of the group's net profit for the fiscal year.

The group said it had improved its sales mix and margins through reduced sales of low-margin segments, as well as lower trade promotions, costs and interest expense.

The company's gross margin for the quarter also rose to 26.8 per cent from 17.8 per cent

Del Monte's topline for Q4 came in at US$497.8 million, down 22 per cent from US$638.4 million in the same quarter last year. The group attributed this to a decline in sales in the US.

Del Monte's US subsidiary, Del Monte Foods Inc (DMFI), generated sales of US$328.2 million in Q4, down 34.4 per cent from the previous year on the back of an "extremely high base" due to peak pantry loading that took place in March to April last year. Reduced promotions and lower private label sales also contributed to the decline. This was, however, partially offset by lower trade spend and cash discounts.

In the Philippines, sales rose by 11.9 per cent in US dollar terms due to higher retail and foodservice sales. The group booked higher sales volume in its convenience cooking and dessert, as well as healthy beverages and snacks segments.

Del Monte said it has decreased its net debt to US$1.3 billion from US$1.4 billion, and reduced its gearing to 2.0 times from 2.4 times its equity in the previous year

In its outlook statement, Del Monte said it will strengthen its core business and expand its product portfolio in response to market trends for health and wellness. The company will also grow its branded business while reducing non-strategic business segments.

The company will also continue to strengthen its product offerings and enter new categories. It is also proactively addressing any inflationary impact from commodity headwinds and increased transportation costs through revenue and cost drivers.

Barring unforeseen circumstances, Del Monte said it is expecting to generate a higher net profit in FY 2022.

Shares in Del Monte closed at 42.5 Singapore cents on Wednesday, up 4.9 per cent or S$0.02.