Del Monte Pacific revealed narrower losses in the first quarter of its financial year and said it expects to turn a profit in fiscal 2017.
The company revealed its net loss fell to US$8.7m in the three months to 31 July, up from the loss of $10.7m in the comparable period of last year. Losses included one-off costs associated with the closure of a US production plant. Excluding one-off items, net losses would have totalled $5.9m.
Go deeper with GlobalData
The improvement was supported by a stronger operating performance. The company, listed in Singapore and the Philippines, revealed operating profit of $6.8m versus $2.6m last year. The group’s operating margin stood at 1.5%, compared to 0.6%, as it shed low-margin business in the US.
Exiting less profitable business did, however, weigh on sales. Revenue dropped 2.8% to $465.5m in the period. Sales declined 6.1% in the US, where Del Monte Pacific generates 75.4% of its sales, offsetting a “strong performance” for the Del Monte brand in the Philippines and the S&W brand in the rest of Asia.
Del Monte Pacific stressed its first quarter is typically its weakest and, looking to the remainder of the year, said it expects to turn a profit in 2017. The company said it will aim to unlock the growth potential of its brands in healthy snacking and accelerate its penetration of the foodservice sector.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
