Del Monte Q3 profit down 13%
MANILA, Philippines - The proposed acquisition of the US consumer food business of Del Monte Foods pulled down the 3rd quarter net income of local fruit grower and canner Del Monte Pacific Co. Ltd. by 13.4% to $7.2 million.
In a disclosure to the Philippine Stock Exchange (PSE) on Friday, October 25, Del Monte said it incurred one-time transaction fees of $1.7 million for the $1.675 billion buyout of Del Monte brand rights in the US and South America, a move that will enable it to expand its presence in these markets.
The July-to-September performance brought the company’s 9-month net income to $17.84 million, a 5% decline against $18.75 million recorded a year ago.
Third quarter sales grew by 9% to $127 million from $116.6 million due to the strong performance of the non-branded business and the S&W segment, both processed and fresh. This brought 9-month sales to $335.4 million, up 12% from prior year’s $300.2 million.
Sales in the Philippines grew 11% in the 3rd quarter on growth across all major product categories and favorable sales mix.
Sales in China and the Middle East contributed to the 6% increase in S&W branded processed segment Robust sales in Japan, China and Korea helped the S&W branded fresh business expanded by 24%.
PSE-listed Del Monte is a Philippines-based producer of pineapple, pineapple juices, tomato sauce and ketchup.READ: Del Monte to focus on branded products
Del Monte Foods, on the other hand, owns the brand rights for Del Monte, S&W and College Inn food products in the US and South America.
For the whole year of 2013, Del Monte expects to report lower net income as a result of the one-off transaction fees, as well as dual listing expenses.
In June, Del Monte Pacific listed on the PSE by way of introduction, marking the first dual listing on the local stock exchange. It has been listed on the Singapore Stock Exchange since 1999. (READ: Del Monte now listed in both PH, Singapore exchanges)
“Barring unforeseen circumstances, the group expects to improve base earnings in 2013 driven by both branded and non branded business with higher revenue from better volume and sales mix in the Philippines,
S&W markets and export markets,” Del Monte said.
“The group continues to pursue sales of higher margin value-added products. In addition, the group continues to implement operational efficiencies, procurement savings and active cost management,” it
Del Monte is 67% owned by NutriAsia Pacific Ltd., a company owned by the condiments king Joselito Campos who belongs to one of the richest families in the country. - Rappler.com