Branded and private label food producer Del Monte Foods has reported first quarter net profit at almost double the level achieved a year ago, helped by higher prices.
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Net income for the first quarter ended 31 July 2005 was $16.2m, compared with $8.5m in the equivalent period last year. Net sales rose to $671.1m from $626.0m last year.
The year-over-year first quarter earnings increase was driven by the positive impact of higher pricing, the company said. Lower integration expense, reduced interest expense, lower commodity costs and new and existing product volume growth also positively impacted earnings. Increased inflationary costs in steel, energy, logistics and other transportation-related costs, higher overhead expense and higher fish costs partially offset the positive earnings.
The increase in net sales was driven primarily by increased pricing across the businesses and volume growth from existing and new products partially offset by volume loss associated with price increases. Sales increased across each of Del Monte Foods’ operating segments.
“We are pleased with the quarter’s results in both our Consumer and Pet businesses,” said Richard G Wolford, chairman and CEO of Del Monte Foods. “Our strong brands have enabled the successful pricing actions taken over the last several quarters as inflationary cost pressures persisted and fish costs increased. As well, our aggressive supply chain cost reduction program continues to deliver savings – this will be particularly important as oil prices have continued to rise. Looking forward, we are making progress on Project Brand which is sharpening our business focus and accelerating the orientation of our business around our leading brands.”
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