DEL MONTE PACIFIC Ltd. (DMPL) on Monday said it saw a net loss of $127.3 million for the fiscal year ending April 2024, a reversal from the prior year’s net income of $16.9 million, primarily attributed to decreased gross profit.
Looking ahead to fiscal year 2025, DMPL anticipates another net loss, albeit reduced, and is focusing on selectively selling assets, injecting equity through partnerships, rightsizing its workforce, and reducing fixed costs, it said in a statement to the stock exchange.
The company cited a 30.4% decline in gross profit to $422.2 million from $607 million, driven by inventory-related costs in its US operations and reduced pineapple supply in Asia.
Although sales increased marginally by 0.3% to $2.42 billion, driven by higher US sales and increased fresh pineapple exports to China and South Korea, earnings before interest, taxes, depreciation, and amortization plummeted by 59.6% to $133.2 million.
Del Monte Foods, Inc., the company’s US unit, contributed $1.74 billion, or 72% of total sales.
Meanwhile, Del Monte Philippines, Inc., reported sales of P38.7 billion, a 5.6% decline in peso terms, due to lower pineapple harvests and increased interest costs stemming from higher interest rates and loan balances.
For the fourth quarter, DMPL’s net loss widened to $76.7 million from $11.9 million a year earlier, attributed to lower gross profit and increased interest expenses.
The company has established a task force to enhance gross margins, particularly in the US and across DMPL, starting in the second half of fiscal year 2025, despite ongoing high inflationary pressures, particularly in the US.
Initiatives include reducing inventory, minimizing waste and write-offs, cutting warehousing and distribution costs, consolidating manufacturing operations, enhancing planning through digitization, ensuring clear organizational accountability, and improving productivity for processed pineapple variety C74 over the next 12 to 24 months.
Additionally, DMPL plans to drive growth through innovations such as Joyba bubble tea in the US and expanding its dairy business in the Philippines. It also aims to bolster its fresh business in North Asia and other export markets through increased investments.
“The group will pursue all these initiatives in fiscal year 2025 but the results will only be fully reflected in fiscal year 2026,” DMPL said.
On Monday, DMPL shares fell by 12.36% or 68 centavos, closing at P4.82 each. — R.M.D. Ochave