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Del Monte Results Announcement
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katak88
Master |
18-Mar-2022 10:56
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Del Monte Pacific voluntarily suspends prefs ahead of redemptionMerkado Barkada
March 17, 2022 | 9:00am
Del Monte Pacific [DELM 14.44 6.80%] announced last week that it would redeem the first series of its preferred shares that are traded under the " &ldquo DMPA1&rdquo " ticker symbol, for $10 US per share, plus any accrued/unpaid dividends, minus transfer costs. Considering that there are 20 million DMPA1 shares in circulation, that amounts to about $200 million that DELM must pay to get the obligation of the preferred shares off its books in accordance with the terms of the shares themselves. Yesterday, DELM disclosed that it voluntarily suspended trading in DMPA1, in order to determine who the shareholders will be as of March 25, which is the ex-date of the redemption of the shares. DELM didn&rsquo t rule out re-issuing the Series 1-A shares at some point in the future, but said that it currently &ldquo has no current plans&rdquo to do so. MB BOTTOM-LINEThis kind of thing looks and sounds pretty serious, but in reality, this is how preferred shares work: the company takes on an obligation to pay dividends in return for a quick injection of cash, and then, at some point in the future, when it has enough money and its situation has improved or changed such that carrying the obligation of paying the dividends becomes more expensive than redeeming the shares, it simply redeems the shares. All of this is done under the terms of the preferred shares themselves, including the " &ldquo redemption price&rdquo " that must be paid in order for DELM to do this. Selling preferred shares is a pretty easy way of raising some money for a company that might not want to take on additional debt (or be able to take on additional debt), and the obligation (dividends) is neatly predictable in a way that executives can easily plan for (and around). This kind of transaction basically comes down to a &ldquo price of money&rdquo calculation if DELM can get a good deal on a term loan from a bank, or it has the cash on-hand with nothing better to spend it on, it can deploy that cheap debt or cash to get rid of the more-expensive preferred shares obligation. It&rsquo s corporate financial hygiene in action. It&rsquo s not exciting, but it' &rsquo s mildly interesting to me when I start to think about money as having a " &ldquo price&rdquo " in the context of these sorts of moves. . . https://www.philstar.com/business/stock-commentary/2022/03/17/2167898/del-monte-pacific-voluntarily-suspends-prefs-ahead-redemption |
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tcctcc
Senior |
16-Mar-2022 11:47
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Smartkarma organised a webinar yesterday on Delmonte. Management still upbeat on fourth quarter and mentioned sales should not be affected by Russian-Ukarine crisis, cost pressure is a concerned though. Reiterate that the company will pay 30% of EPS as dividend. Think only after their FY22 result is out in June then maybe it will move up. Not for contra. | ||||
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chiachiawee
Elite |
16-Mar-2022 09:37
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Wow. Higher TP with lower PE. Why not peg to same PE with its credit rating improved and debt ratio. Anything la. Power you Philip. Lol. | ||||
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Joelton
Supreme |
16-Mar-2022 09:08
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Phillip raises Del Monte target price to S$0.63 on higher Patmi, lower expenses
PHILLIP Securities Research raised its target price on canned food brand Del Monte Pacific Del Monte Pac: D03 -2.82% to S$0.63 from S$0.62, after raising its forecasts on the company' s profit after tax and minority interests (Patmi) for FY2022 by 7.5 per cent.
In a report on Tuesday (Mar 15), research analyst Vivian Ye expects operating and interest expenses will likely be lower for the rest of its fiscal year, which is in line with trends for its first 9 months ended January.
The analyst had a " buy" call on the counter. The target price is pegged to 12 times the brokerage' s estimates for Del Monte' s FY2022 price to earnings ratio, down from 13 times.
Shares of Del Monte were down S$0.005 or 1.4 per cent to S$0.35 as at 2.37 pm on Tuesday.
The company posted earnings of US$25.9 million for the third fiscal quarter ended January, down 14 per cent from net profit of US$30.2 million in the same period a year ago, while net profit for the 9-month period was up 64.2 per cent on year to US$80.1 million.
Revenue for the quarter was up 4.9 per cent to US$659.4 million, which the group attributed to higher sales in the United States across almost all major categories, as well as higher exports of S& W branded premium fresh pineapples.
Ye said the results had exceeded the brokerage' s expectations on revenue and Patmi, with revenue from the Americas, from its US subsidiary Del Monte Foods Inc (DMFI), beating the brokerage' s forecasts.
She, however, noted that gross profit was lower than expected due to inflationary pressures. Del Monte recorded an 8 per cent increase in cost of sales for the quarter to US$496.2 million, which resulted in gross profit falling 3.4 per cent to US$163.2 million.
Higher manufacturing costs driven by commodity headwinds, weather-related events and freight headwinds, particularly ocean freight on co-pack products, had " more than offset" higher sales at DMFI, Ye said.
Nevertheless, she expects this dip in margins would be temporary.
Additionally, the analyst said the company is improving its cost of debt in the long term, and expects DMFI will issue debt at a lower cost. This comes after S& P Global Ratings raised its credit rating on DMFI and issue-level rating on its debt, while Moody' s upgraded DMFI' s corporate family rating.
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Observers
Elite |
12-Mar-2022 20:30
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Perhaps these cost inflation pushed out the other smaller players with lower economy of scales. This might explain why Del Monte was able to gain market share in the reported quarter for their canned vegetables. Smaller, niche players cost shot thru the roof. | ||||
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chiachiawee
Elite |
12-Mar-2022 12:42
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My take is it will be at the higher range of sing 5 cents closer to 6 cents. Just bought some at prospective PE of 6-7x. Wait market to discover its potential to move closer to its peers at PE12x and above. Cheers.
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phongy45
Senior |
12-Mar-2022 11:19
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tcctcc
Senior |
12-Mar-2022 11:07
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https://www.delmontepacific.com/hubfs/Concall/Del%20Monte%20Pacific%203Q%20FY2022%20Results%20Briefing%20v2.mp4 If you interested to buy Del Monte shares, you may want to watch the 3rd quarter result briefing via the above link. The CEO mentioned that even with the current situaton in Europe, they expect 4th quarter 2022 to be better than 2021 which means the full year profit should be above US $95 million which translate to an EPS of Sing 5 cents.
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Joelton
Supreme |
12-Mar-2022 10:00
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Del Monte to raise product prices by 6-7% to counter inflationary pressures
CANNED food brand Del Monte Pacific is set to raise prices of its products by 6 to 7 per cent on average in both its US and Philippines markets in 2022 as inflationary pressures weigh on margins, company executives said on Friday (Mar 11).
In a call to discuss the group' s latest financial results, Parag Sachdeva, chief financial officer of Del Monte' s subsidiary Del Monte Philippines Inc (DMPI), said that the percentage hikes reflect the prices that will be " taken in the coming quarters" versus the prices taken in 2021.
In response to a query on whether the price hike will cause Del Monte to lose market share to competitor brands, Gregory Longstreet, chief executive of Del Monte' s US subsidiary Del Monte Foods Inc (DMFI), said he believes this will not be the case.
He said: " All grocery prices are rising, so we' re very consistent at this point with what... our competition is doing. We always have been proactive in pricing, and we also monitor what our competition is doing, so we don' t fear any damage in terms of demand or share resulting from our latest round of pricing actions."
Longstreet said price revisions are not solely driven by inflation, but also stem from the group' s need to maximise value and margins, and monitor elasticity.
Company executives stressed that the strength of the company' s brand is what gives the group " pricing power" . Del Monte has built " brand equity" in the markets it operates in, and that has allowed the group to " hold on to its business" and make price revisions where necessary.
Del Monte on Thursday posted earnings of US$25.9 million for the third fiscal quarter ended January, down 14 per cent from a net profit of US$30.2 million in the corresponding year-ago period.
Revenue for the quarter was up 4.9 per cent to US$659.4 million, which the group attributed to higher sales in the US across almost all major categories, as well as higher exports of S& W branded premium fresh pineapples.
However, Del Monte' s cost of sales for the quarter was up 8 per cent to US$496.2 million, which resulted in gross profit falling 3.4 per cent to US$163.2 million.
The group took a hit from cost inflation for raw produce, metal packaging and transportation - all of which put pressure on margins. DMFI, in particular, was affected by these inflationary pressures.
One of the concerns among analysts and shareholders is Del Monte' s high debt levels. For the 3 months ended January, the group saw its net debt to Ebitda (earnings before interest, taxes, depreciation and amortisation) improve slightly to 4.2 times from 4.5 times previously, and gearing to equity ratio fall to 2.1 times from 2.2 times previously.
In the near term, Sachdeva said the company' s debt to equity ratio will rise above 3 times as it refinances its preference shares, but in the long term, this should fall to less than 1.5 times.
Despite relatively high debt levels, Del Monte has not tapped equity markets for funds. Sachdeva said the company currently prefers to take the initial public offering route in order to pare its leverage and refinancing obligations.
Del Monte' s plans to list its subsidiaries in the US and Philippines are " still on the table" , but volatile market conditions globally mean the company is unable to give a specific timeline or further details of the listings, he said.
Looking ahead, Sachdeva said he expects the group to book a higher profit in Q4 this year, compared to the same period in FY2021.
The company will also remain vigilant in managing its costs amid a high-cost environment.
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katak88
Master |
11-Mar-2022 20:21
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Del Monte Pacific profit up 64%March 11, 2022 | 12:01 am
DEL MONTE Pacific Ltd. announced that its net profit for the nine-month period in 2021 was up 64% or $80 million due to higher sales and exports. In the third quarter of 2021, Del Monte Pacific sales grew by 5% to $659.4 million on higher sales in the United States and fresh pineapple exports. US subsidiary Del Monte Foods, Inc.&rsquo s net profit tripled to $35.2 million, while Del Monte Philippines, Inc. rose 15% to $81.5 million. &ldquo Del Monte Foods, Inc. sales increased by 6% on higher branded retail primarily canned vegetable and fruit which more than offset the planned reduction of low-margin private label,&rdquo the company said in a statement on Thursday. &ldquo Del Monte canned vegetables, which had the highest contribution to branded retail sales, saw a four point increase in market share on the back of strong commercial execution, increased distribution on core products, new products including multi-packs, and superior supply chain service. Canned fruit and fruit cup snacks also registered a higher share,&rdquo it added. Meanwhile, Del Monte Philippines, Inc., achieved sales of $197.1 million, on higher exports of fresh pineapple to North Asia. &ldquo Sales in the Philippines recovered after two quarters of decline coming off a very strong financial year in 2021 &hellip driven by good performance of both core categories, packaged fruit and beverage, and new products. Beverage increased by 7% behind consumer upsizing to better value multi-serve carton packs,&rdquo the company said. &ldquo Cost headwinds in the third quarter were quite significant impacting margins and profits. Our strong results for the first nine months allowed us to be substantially ahead of last year. While the road ahead has many challenges, we remain relentless in our revenue-enhancement and razor-focused on cost-saving initiatives,&rdquo said Del Monte Philippines&rsquo Chief Executive Officer Joselito D. Campos, Jr. &mdash Luisa Maria Jacinta C. Jocson . . https://www.bworldonline.com/del-monte-pacific-profit-up-64/ |
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chiachiawee
Elite |
11-Mar-2022 16:43
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It?s peers are trading at PE12x and above. Give it a discount for high debt should have a PE10x. Cheers.
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tcctcc
Senior |
11-Mar-2022 16:32
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Based on the share price drop today, apparently, many are disappointed with the 3rd quarter result as compared to last year 3rd quarter. Barring any major problem in Europe, EPS for FY22 shoule be able to reach minimally 5 cents. The high debt is an issue though it has improved over the last few years which warrant upgrade of credir rating by Moody and S& P. It is only trading at prospective PE of 8 if stock price is at 40 cents.. | ||||
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katak88
Master |
11-Mar-2022 16:29
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Del Monte to raise product prices by 6-7% to counter inflationary pressuresTHU, MAR 10, 2022 - 6:25 PM
CANNED food brand Del Monte Pacific is set to raise prices of its products by 6 to 7 per cent on average in both its US and Philippines markets in 2022 as inflationary pressures weigh on margins, company executives said on Friday (Mar 11). In a call to discuss the group' s latest financial results, Parag Sachdeva, chief financial officer of Del Monte' s subsidiary Del Monte Philippines Inc (DMPI), said that the percentage hikes reflect the prices that will be " taken in the coming quarters" versus the prices taken in 2021. In response to a query on whether the price hike will cause Del Monte to lose market share to... |
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chiachiawee
Elite |
11-Mar-2022 11:21
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Yes. To put things in context, it has paired down its debt from a high of debt to equity of around 6x since 2015 to 2x as of today. Its a significant improvement. Credit rating upgrade from Moody further testified it. 9M EPS is at US$3.36 cents, if it can achieve the similar EPS for the last Q, full-year EPS would be US$4.44 cents, equivalent to S$5.5 cents. At 0.35, it is trading at 6x PE of the estimated 2022 annualized earnings. Other peers are trading at PE of 11x and above. Undervalued. cheers. | ||||
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katak88
Master |
11-Mar-2022 11:12
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DMPL saw an improvement in its net debt/EBITDA to 4.2x from 4.5x and gearing to 2.1x from 2.2x equity. DMFI achieved a credit rating upgrade to &ldquo B2&rdquo from &ldquo B3&rdquo from Moody&rsquo s and an upgrade to Positive Outlook from S& P. This reflects DMFI&rsquo s strengthening operating performance following prior year&rsquo s recapitalization and major operational restructuring which has improved liquidity and leverage. DMFI has syndicated a new US$600m Term Loan which it intends to close on May 16 when its Senior Notes ($500m @11.875%) become callable. This new loan has a materially lower interest rate that will recover the one-time cost of redemption of the Senior Notes and result in net savings. If the new 7-year term loan US$600m get 5.5% coupon interest, the difference bewteen the interest payable for the new loan (US$600m @5.5% = US$33m) vs the Senior Notes (annual interest is [email protected]% = US$59.375m) to be redeemed, ie. annual saving of US$26m for the remaining 3 years, minus one time fee incurred.
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chiachiawee
Elite |
11-Mar-2022 10:15
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Looks like it can easily meet Philips? earnings assumption. 9M already forms about 90% of it. Cheers.
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Observers
Elite |
11-Mar-2022 10:11
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Jialat leow lah. Q3 not even Ukraine war, already down 14%, after Ukraine war down how many %?
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Joelton
Supreme |
11-Mar-2022 09:32
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Del Monte Q3 net profit down 14% to US$25.9m as inflationary pressures weigh on margins
CANNED food brand Del Monte Pacific Del Monte Pac: D03 +1.27% on Wednesday (Mar 9) posted earnings of US$25.9 million for the third fiscal quarter ended January, down 14 per cent from net profit of US$30.2 million in the corresponding year-ago period.
This took the group' s net profit for the 9-month period to US$80.1 million, up 64.2 per cent from earnings of US$48.8 million in the comparable period for the previous year.
" Cost headwinds in the third quarter were quite significant impacting margins and profits," said Del Monte Pacific' s chief executive Joselito Campos Jr. " While the road ahead has many challenges, we remain relentless in our revenue-enhancement and razor-focused on cost-saving initiatives."
Revenue for the quarter was up 4.9 per cent to US$659.4 million, which the group attributed to higher sales in the US across almost all major categories, as well as higher exports of S& W branded premium fresh pineapples.
However, Del Monte' s cost of sales for the quarter was up 8 per cent to US$496.2 million, which resulted in gross profit falling 3.4 per cent to US$163.2 million.
Del Monte' s US subsidiary, Del Monte Foods Inc (DMFI), accounted for 71 per cent of the group' s sales in Q3. DMFI' s sales rose 6.5 per cent to US$468.4 million on the back of higher sales from branded retail primarily core canned vegetable and fruit, which more than offset the planned reduction in private label sales.
Sales from DMFI' s foodservice channel also grew significantly as the business continued to recover alongside strong fruit sales in support of re-opening of schools and restaurants. New products launched in the past 3 years also contributed 5.8 per cent to DMFI' s total sales in the Q3, said the company.
Similar to its peers, DMFI was hit by cost inflation for the likes of raw produce, metal packaging and transportation, which led to lower margins that offset higher margins in the rest of the group.
Over in the Philippines, sales rose 4.2 per cent in peso terms despite a higher base a year ago driven by the pandemic. Growth was seen across nearly all categories despite continued lockdowns and lower foot traffic due to the pandemic, said Del Monte. In US Dollar terms, total sales for this unit inched down by 0.7 per cent to US$117.3 million due to a weaker peso.
New products launched in the past 3 years contributed 4.7 per cent to total sales in the Philippines, said the group.
Sales of Del Monte' s S& W branded business was up by 11.2 per cent due chiefly to higher sales of fresh pineapples in North Asia and Singapore. S& W pineapples sold in China also benefited from expanded distribution coverage in tier 2 and 3 cities by the company' s distributors.
However, Del Monte' s stake in the FieldFresh joint venture in India suffered a US$0.5 million loss in Q3 as growth in processed business was offset by the decline in fresh sales. Margins also continued to be pressured due to inflationary trends.
Looking ahead, Del Monte said it will remain vigilant in managing its costs amid a high cost environment. Barring unforeseen circumstances, the group expects to generate higher net profit in FY2022.
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chiachiawee
Elite |
10-Mar-2022 21:13
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Wow. 9M EPS forms around 90% of UOB full year 2022 estimates. Power. | ||||
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Charity88
Senior |
10-Mar-2022 20:31
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https://www.delmontepacific.com/hubfs/pdf/DMPL_3QFY2022_PressRelease_FINAL.pdf 10 March 2022 Del Monte Pacific Achieves Higher Sales and Net Profit for the Nine-Month Period with Net Profit of US$80.1m up 64% Third Quarter
Nine Months
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