Chapter 8 Changes in Capital

Del Monte Pacific Limited on Wednesday posted a 17.4 per cent increase in net profit to US$5.96 million from a year ago, for the fiscal second quarter ended June 30, 2012.

Turnover rose 12.9 per cent year on year to US$108.9 million, due to higher performance in the Philippine market, and the S& W brand, both processed and fresh.

Philippine sales increased by 17 per cent on volume and mix improvements. Higher sales in the Philippines were driven by the strong performance of fruit juices. Del Monte 100 per cent Pineapple Juice's positioning as a daily health maintenance drink was further underlined by the successful advertising campaign behind its Heart Smart juice variant for cholesterol reduction.

The S& W branded business, both processed and fresh, turned in another strong quarter with sales expanding by 66 per cent to US$8.9 million. The group penetrated new markets in the first quarter of 2012 - the Middle East for its processed products, and Japan for its fresh fruit under the S& W brand. These new markets generated higher sales in the second quarter versus the first quarter.

However, export sales declined by 6 per cent on lower industrial pineapple product sales. Export operating income was much lower, down by 55 per cent. With high pineapple supply in Thailand and weak demand in Europe, market pricing had softened significantly.

Earnings per share for the quarter was 0.55 US cents, up from 0.47 US cents a year ago.

Cumulative six months earnings was US$10.37 million, up 57.4 per cent from a year ago, while turnover rose 10.8 per cent to US$183.61 million.

Earnings per share for the period was 0.96 US cents, up from 0.61 US cents a year ago.

An interim dividend of 0.72 US cents per share has been declared. A year ago, the group paid out 0.46 US cents per share in interim dividends. 

 

 

 

Del Monte Pacific announced today that third quarter (3Q2011) net profit more than doubled to US$7.8 million ($9.9 million) from US$3.3 million a year ago while revenue increased 19% to US$105.3 million from US$88.4 million.

Higher sales across all major markets led to overall improved sales. Exports continued to be a key driver, growing 33% on the back of better prices and sales mix, and increased volume.

The S& W branded business, both processed and fresh, performed strongly as well. Sales more than doubled to US$5.6 million as a result of higher sales of canned tropical fruit and fresh fruit to Korea and China.

The brand entered the China market in the fourth quarter of 2010 and has recorded encouraging sales in that market since then. The group also expanded the brand into the Taiwan market recently.

Sales in the Philippines grew 4% versus the same period last year with improved performance across all major product categories. Processed fruit, canned juice and culinary categories registered double-digit growth.

For the processed fruit category in the Philippines, the lower cash outlay for pineapple tidbits in pouch, sustained its strong sales momentum, while sales of S& W fresh fruit doubled, driven by improved quality control, supermarket outlet expansion and merchandising.

Sales of canned 100% pineapple juices were higher on the back of a high profile advertising campaign promoting their health benefits: immunity, fiber and cholesterol reduction.

The culinary segment registered the highest growth due to improved product taste and packaging size changes, backed by advertising and more extensive distribution.

Meanwhile, the group temporarily limited shipments of drinks in PET to run down inventories in anticipation of the October re-launch of the product with a new formulation.

Group gross profit in the third quarter rose 35% to US$25.5 million from US$18.9 million and gross margin increased to 24.2% from 21.4% on better prices and sales mix. The group also improved pineapple yields and production efficiencies. Furthermore, tomato paste and obsolescence costs were lower.

Sales at the group’s Indian joint venture, FieldFresh Foods, rose 49% to US$9.3 million in the third quarter from the same period last year.

Del Monte branded sales grew by 80% to US$7.4 million, contributing almost 80% of total sales. However, the group recognised an equity loss of US$2.7 million, higher than last year’s US$1.5 million, due to higher marketing, trade promotion, overhead and depreciation costs after the commissioning in December 2010 of the new manufacturing and R& D facility near Bangalore.

The Del Monte brand footprint in India has expanded to approximately 57,000 outlets.



Barring unforeseen circumstances, the group expects to continue delivering improved earnings in 2011. The group expects stronger performance with higher sales from better mix and volume delivering improved margins, coupled with better operational productivity and efficiencies, and active cost management. 

 

 

Mainboard-listed Del Monte Pacific today announced a third quarter net profit of US$3.3 million ($4.27 million), reversing a net loss of US$1.7 million in the same period last year. Sales rose 16% to US$88.4 million from US$76.3 million due to higher turnover in the Philippines and export markets, both in processed and fresh business segments.

Sales in the Philippines improved 19% with increased sales in all major product categories on higher volume, prices and better sales mix. The group recently launched the Del Monte Fit ‘n Right tea in two flavours - peach and lemon. This extends the popular Fit ‘n Right brand from juice drinks to tea, a new beverage category for the company.

Exports of processed products grew 14% on better prices. As the group’s unprofitable supply contract with a major customer officially ended at the end of May 2010, the group has begun to develop a higher margin business in Europe with market-driven pricing.

Sales of fresh fruit continued to perform strongly, growing by 34% with increased supply and a better mix in favour of higher margins for the premium variety.

Overall, the group increased sales by 16% in the third quarter, which was at a faster pace than in the first and second quarters which expanded by only 9% and 8%, respectively. In addition, the group’s gross margin increased significantly to 21% from 14% in the prior year quarter, and also showed a steady increase against this year’s first and second quarter margins of 16% and 19%, respectively.

Pineapple yields improved versus the same period last year after upgrading and streamlining agricultural practices. Cannery operating costs also declined from greater efficiencies and were further aided by lower tinplate costs. Other initiatives to improve productivity and efficiency have also resulted in a better cost structure and enhanced profitability. These initiatives include increased usage of natural sugar recovered from pineapple and utilising alternative natural sweeteners to mitigate high sugar prices.



For the quarter, the company recognised a share of loss in FieldFresh India of US$1.5 million, higher than last year’s US$0.9 million, but lower than second quarter’s US$2.2 million. Del Monte in India continues to improve market coverage, and is now present in 30 cities and about 30,000 outlets. Del Monte branded sales in India grew threefold for the quarter over the same period last year. FieldFresh recently launched a new mustard sauce, Del Monte Mustard NOW!, in a squeezy pack, expanding its culinary line which currently comprises sauces and ketchups. The new facility of FieldFresh near Bangalore, which will house manufacturing facilities for both juice drinks and culinary products, is gearing up for commercial production by the middle of the fourth quarter. 

Book closure date *******

Payable date ************* US$ 0.0176 ******** US$ 0.0080 ******** US$ 0.0195 ****** USS$ 0.007312 March 2009 ****15 August 2008 **** 14 March 2008 **** 22 August 200726 March 2009 **** 28 August 2008 **** 27 March 2008 **** 5 September 2007