Del Monte Pacific racked up a net loss for the first quarter of its financial year as costs related to its US$1.68bn acquisition of Del Monte Foods dented the bottom line.
In a regulatory filing, the group said losses in the three months to the end of July totalled $21.9m compared to a $4.2m profit made in the same period a year ago.
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Profitability was hit by higher interest expenses from long-term loans to acquire Del Monte Foods as well as short-term bridge financing, which will be refinanced through an equity issue in the Philippines.
An ordinary share public offering will be followed by a perpetual preference share offering and a rights offer. These target to reduce company borrowings by approximately $520m.
The company’s operating loss totalled $12.1m, compared to operating earnings of $8.1m last year. First-quarter EBITDA was $21.5m before acquisition related expenses, the group stressed.
The fruit grower and canner said it aligned its financial year with that of Del Monte Foods – whose financial year runs from May to April.
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By GlobalDataDuring the period, the group generated sales of $445.6m, of which Del Monte Foods contributed $330.5m. Last year – before the Del Monte Foods acquisition – sales totalled $119.3m.
CEO Nils Lommerin said Del Monte Pacific’s top-line performance has improved significantly since the acquisition and insisted the group was making progress in integrating the operations of both businesses.
Del Monte Pacific plans to improve its margins by outsourcing back office functions to the Philippines and changing its Enterprise Resource Planning to a new system in February.
Shares in the group, which is listed in the Philippines and Singapore, edged down 0.94% on the announcement.
