Del Monte Pacific kept at &lsquo buy&rsquo by UOB with 47 cents target price

SINGAPORE (June 29): Del Monte Pacific has swung back to profitability in FY16 on one-off gains.

For the 12 months ended April, earnings came in at US$51.5 million ($69.7 million) compared to a loss of $32.2 million in FY15.

This was mainly due to one-off net favourable adjustments of US$31.7 million after tax mainly due to DMFI&rsquo s retirement plan amendment in the second quarter and working capital adjustment in the fourth quarter.

Excluding non-recurring items, core net income in FY2016 was US$19.8 million, still a big improvement from the reported loss of US$43.2 million last year.

Full-year revenue came in 3.7% higher at US$2.27 billion from US$2.19 billion a year ago.

Del Monte Pacific says its US subsidiary, Del Monte Foods, which accounted for 78% of Group sales, generated revenue of US$1.8 billion, 4% better than prior year.

DMFI increased its market share in the US canned vegetable and fruit segments amidst industry contraction.

The Philippine market also delivered a record performance for the full year with sales up 6% as all product categories &ndash packaged fruit, beverage and culinary &ndash posted higher sales, driven by an expanded user base and household penetration.

Sales of the S& W branded business in Asia and the Middle East also posted a record performance, growing by 10% on higher sales from both the fresh and packaged segments. China generated strong growth in fresh, driven by distribution expansion.

The group&rsquo s gross margin for the full year improved to 21.2%, higher than the 18.7% in the same period last year with lower trade spend in DMFI and cost optimisation initiatives to mitigate the impact of lower pineapple output from El Niñ o, particularly in the first half of the financial year.

For the 4Q ended April, Del Monte Pacific posted earnings of US$19.2 million from a loss of US$4.2 million a year ago.

Revenue was down 2.8% to US$520.1 million.

As part of the group&rsquo s deleveraging plan, Del Monte Pacific says it intends to issue US dollar denominated perpetual preference shares in the Philippine capital market, to be listed on the Philippine Stock Exchange (PSE).

The board has declared a dividend of 1.33 US cents per share, representing a 50% payout of FY2016 net profit.

In its outlook, the group says it expects to stay profitable in FY2017.

Del Monte Pacific shares closed at 32 cents on Tuesday.

  

DEL Monte Pacific swung to the black in the final quarter ended April 30, 2016, recording a net profit of US$19.2 million compared with a loss of US$4.2 million a year ago.

The improvement was led by a one-off gain of US$8.4 million after tax as well as strong operating results across Asia.

Turnover fell 2.8 per cent to US$520 million owing to lower sales in the United States, which was partially offset by a strong performance in the Philippines under the Del Monte brand and the rest of Asia under the S& W brand, said the firm.

Earnings per share came in at 0.99 US cent from a loss per share of 0.25 US cent.

  

For the full year, it reported a profit of US$51.5 million versus a loss of US$43.2 million a year ago on the back of a nearly 4 per cent jump in revenue to US$2.3 billion.

The company declared a final dividend of 1.33 US cents per share, representing a 50 per cent payout of FY2016 net profit compared with none the previous year.