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.
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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.
