Del Monte trims Q1 net loss to US$3.5m as Covid-19 spurs sales growth

MAINBOARD-LISTED food producer Del Monte Pacific saw sales spike in the first quarter, driven by higher demand amid the Covid-19 pandemic.

Revenue rose to US$413.1 million, up by 9.9 per cent year on year, on higher sales in the United States and the Philippines, figures from its unaudited results indicated on Wednesday.

The company's net loss narrowed to US$3.25 million for the three months to July 31 from US$38.3 million in the year before, when Del Monte clocked heavy one-off expenses related to withholding taxes.

Operating profit was US$20.7 million, up by 1.9 per cent from US$20.3 million before.

"Given the seasonality of the business, the first quarter is historically the lowest quarter of the group," Del Monte noted in its financial statements.

It expects to return to profitability in FY2021, barring unforeseen circumstances, it said, adding that it has been exploring e-commerce opportunities.

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"The strategy is to strengthen the group's core business and expand its product portfolio in line with market trends for health and wellness, and grow its branded business, while reducing non-strategic business segments," the group added in a statement.

In the core US market, which makes up close to two-thirds of group sales, Del Monte attributed higher sales to "improved volume across almost all categories from the pandemic, partly offset by supply challenges on core vegetables and fruits" as the Covid-19 pandemic prompted a shift in interest to healthy, shelf-stable products.

Otherwise, sales in the rest of the world rose on better performance in the Philippines, the S&W branded business, and exports of packaged pineapple products, although the growth was offset in part by lower sales of fresh pineapples in China.

Loss per share stood at 0.42 US cent, against 2.22 US cents previously, while net asset value more than doubled to 24.9 US cents, from 10.86 US cents as at April 30.

Shares ended at S$0.131 on Wednesday, up by 0.8 Singapore cent or 6.5 per cent, before the latest results were released.