Blame it on one-off items.
Del Monte Pacific has seen its bottomline crashing in its 2Q17 results, slumping to as much as 57.8% to $24.7m (US$20.2m) from $65m (US$47.8m) last year.
The group blamed this on the one-off items recorded in both quarters. Last year saw a one-time gain of US$30.4m mainly from its United States subsidiary Del Monte Foods Inc.'s retirement plan amendment. Meanwhile, the group endured one-off expenses amounting to US$1.5m from the closure of the North Carolina plant and severance.
"Without the one-off items, the Group achieved a net income of US$21.0m, 33% higher than last year’s recurring net income of US$15.8m," the group said.
Overall, Del Monte achieved a 5% lower sales of US$636.2m due to decline sales in its US arm, which accounted for 78% of the overall yield.
"DMFI’s sales declined due to lower inventory builds on packaged vegetable and plastic fruit cup ahead of the holiday season weakness in the canned fruit industry, continued impact of unsuccessful low-margin US Department of Agriculture bids from the second half of FY2016 plus reduced sales in private label and foodservice business lines," the group noted.
On ther other hand, it saw growth in its Philippine market, with sale growing in double-digit terms driven by expanded penetration and increased consumption across categories in retail as well as expansion in the rapidly growing foodservice channel where the Group optimised opportunities.
“The excellent results in the Philippines and the S&W Asian markets, where our teams delivered on both sales expansion and productivity improvement resulting in cost reduction, underscore our strategy to tap into consumption driven growth in Asia which is fuelled by an emerging middle class while, at the same time, seeking to create efficiencies throughout our operations,” said Del Monte Pacific CEO Joselito D Campos, Jr.
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