Del Monte books lower sales due to unfavorable prices
Singapore Mainboard and Philippine Stock Exchange dual listed Del Monte Pacific Limited (DMPL) has booked lower sales during its second quarter FY2018 results ending October due to unfavourable pricing in the United States, among others.
The Group said it has achieved second quarter sales of US$624.7 million, 1.8 percent lower than prior year period due to lower sales in the United States which were affected by unfavourable pricing in food service and US Department of Agriculture as well as higher planned trade promotion spending.
The Group’s US subsidiary, Del Monte Foods, Inc (DMFI), contributed US$485.6 million or 78 percent of Group sales.
Likewise, DMFI’s sales declined by 1.6 percent while volume was marginally higher driven by the strong performance of the packaged vegetable and fruit segments ahead of the holiday season.
The canned fruit and plastic fruit cup categories both grew market shares by 3 percent during the quarter, driven by increased marketing investments, compelling innovations, and strong execution against fundamentals at retail.
As part of the Group’s strategy to improve operational excellence, DMFI divested its underperforming Sager Creek vegetable business. This involved shutting the production facility in Siloam Springs, Arkansas. DMFI also shut its Plymouth, Indiana tomato production facility to improve efficiency and streamline operations. These resulted in one-off expenses amounting to US$23.6 million pre-tax or US$13.1 million post-tax in the second quarter.