Del Monte Pacific profit down 13 pct in Q3
MANILA, Philippines - Del Monte Pacific saw a 13% drop in profits in the third quarter of the year, as it acquired US-based Del Monte Foods' consumer food business.
In a disclosure to the stock exchange, Del Monte Pacific said its net income stood at $7.2 million in the July to September period, lower than the $8.3 million profit it posted a year ago.
Excluding its non-recurring acquisition expenses, Del Monte Pacific's net profit was 7% up at $8.9 million.
"The group expects that the transaction fees (for the acquisition) would be approximately $6 million for the year, which would impact net earnings. However, the base operating income of the group is expected to be higher than last year," the company said.
On October 11, the Del Monte Pacific announced its proposed acquisition of Del Monte Foods’ consumer food business in the US for $1.675 billion.
Sales jumped 9% year-on-year to $127 million in the third quarter, as Del Monte Pacific saw an improvement in its branded and non-branded businesses.
Sales of the branded business of Del Monte Pacific in Asia, which accounts for 65% of total sales in the third quarter, grew 4%.
In the Philippines, sales of Del Monte Pacific grew 4% in dollar terms, but flat in US dollar terms. Volume grew due to improved supply for its resurgent juice business, such as 100% pineapple juice and mixed juice drinks. The company also partnered with Tipco to distribute its fruit and vegetable juices in the Philippines.
"Our initiative to increase juice capacity in the Philippines supported the strong demand for our juices in this key market, while giving us the extra capacity to serve the Asian markets under the S&W brand, thus enabling us to generate higher sales and profitability,” said Joselito D. Campos, Jr., Managing Director and CEO of DMPL.
"We also are on track with reduced losses at our Indian affiliate,” he added. The group recognized a lower share loss of $1.2 million for its Indian FieldFresh joint venture.
In the first 9 months of 2013, the Del Monte Pacific group posted sales of $335.4 million, 12% higher than prior period’s $300.2 million, on branded sales growth.
But net profit fell 5% to $17.8 million, due to the non-recurring acquisition and dual listing expenses.