Del Monte Pac    Last:0.088    +0.002

Del Monte Results Announcement

Market sentiment is more important than actual result. Last week there was a run up from around current price to a high of $0.40 before profit announcement. Profit below expectation so back to square one. Think must wait for next quarter. 

 

Del Monte Pacific kept at &lsquo hold&rsquo with 39 cents target by DBS Vickers
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By   PC Lee   / theedgemarkets.com    | March 14, 2016 : 12:57 PM MYT        

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SINGAPORE (March 14): DBS Vickers is keeping its &lsquo hold&rsquo call on Del Monte Pacific as the pace of its earnings turnaround is not as fast as previously envisaged by the brokerage.

In a Monday report, lead analyst Andy Sim says although Del Monte Pacific&rsquo s 3Q16 was profitable, the results came below expectations. This was due to slower sales registered from its US operations arising from loss of government and OEM contract bids. Sales from US declined by 9% y-o-y to US$466 million ($640 million) while the group&rsquo s Asia Pacific operations performed saw revenue improved by 11.6% in peso terms or 6.4% in USD terms.

&ldquo While 9M16 core profit of US$18.5 million was an improvement from loss of US$23.9 million last year, this was just at 50% of our original full-year estimate,&rdquo says Sim.
&ldquo Our target price is revised slightly higher to 39 cents, as we roll over to the average of FY16F/17F (from FY16F) based on 12x FY16F PE, which is at a 40% discount to consumer peers listed in the US and Philippines,&rdquo adds Sim.

As at 12.55pm, Del Monte Pacific was trading 12.66% lower at 34 cents.

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If the average cost of fund is 5%, the total interest payable for the US$1.9B debt for the DMPL group is less than $100m.
  

If you look at the 9-mth results ann. last week, turnover is US$1.725B, Gross Profit is US$369.3m, operating profit is US$120.8m, less net finance expense US$70.4m, Â   etc.
Net Profit is US$41.9m.
  

  

Know-Your-Stuff      ( Date: 14-Mar-2016 13:24) Posted: Key thing is the US$1.9B of debts. How are they going to pay? Based on their FCF is impossible to pay. Issue bonds, more shares, rights issue? How many years they need to pay down this debt? A long time...

 

Key thing is the US$1.9B of debts. How are they going to pay? Based on their FCF is impossible to pay. Issue bonds, more shares, rights issue? How many years they need to pay down this debt? A long time... 

 

Anyways results bleak, doesnt warrant such a big drop. Its still better than last quarter.

 

The key issue here is how the US subsid. DMFI perform in the coming years after this turnaround in FY2016 results.  

The bullish scenario is DMPL can conitinue to grow and improve the performance of DMFI and ultimately prepare for a listing in US market which can unlock the value of DMPL shares.    

If DMFI cannot perform, the share price of DMPL will continue to be lackluster.

 

Overall still looks good..... guess today might just be a one-off or short term selldown.... good luck everyone! :)

bllue911      ( Date: 14-Mar-2016 09:50) Posted:   UOBKH Del Monte Pacific (DELM SP)  BUY (maintained) 3Q16 Results: Turnaround continues in a challenging quarter accompanied by one-off related expenses  Company Share price(S$) Recommendation Our Target Price(S$) Within Expectation (Y/N) Highlights of Results Del Monte Pacific 0.395 BUY 0.69 Below See attached comments DELM SP 3QFY16    Revenue below our expectations (5-10%).  Sales for the quarter was down 6.8% over the prior year period driven by lower sales in the USA due to unsuccessful USDA government and OEM co-pack contract bids. The USDA government contracts are a low margin non-core business for Del Monte. The company was outbid by competitors who priced their bids very aggressively near to cost price. Market share in the core business of retail centre store of fruit, vegetable and tomatoes remains stable. Sales in the Asia Pacific came in strong at 9% higher yoy. The value of the USDA lost contract is very volatile and was worth about US$40m this quarter. Operating profit improved.  The group achieved an operating profit of US$24.5m which was 4.7% higher than versus the US$23.4m operating income last year due to strong operating results across Asia. Sales in Asia Pacific was up 9%. Gross margins improving.  Gross margins were up in 3Q16 to 20.5% vs 19% for the same quarter last year. The US operations has plans to move away from the lower margin USDA government contracts which will be positive for gross margins moving forward. Non-recurring items.  For 3Q16, the group recorded higher than expected non recurring expenses of US$12.5m on a pre-tax basis against a non recurring gain of US$17.9m for 3Q16. This was due to the existence of higher than expected SAP related costs of US$7.1m and other acquisition related charges of US$5.4m. Net profit below our expectations.  3Q16 reported net profit was US$0.6m better than the loss of US$2.2m last year. The group continues to face acquisition integration charges and SAP related expenses which we now expect to persist into FY17. Perpetual preference shares.  Del Monte expects to launch the preference shares in CY2016 subject to regulatory approval and market conditions. The pricing is expected to be in the range of 5.5% to 7%. We now expect it to happen sometime early FY17. Plans going forward.  Move away from volatile revenue streams such as the USDA government contract bids and move into stable revenue sources. Such as the continued focus on the core retail centre store business and to build food service businesses such as restaurant deliveries. Valuation.  We maintain our  BUY  recommendation with a PE-based target price of S$0.69/share (under review) pending a management meeting.

 

 

UOBKH

Del Monte Pacific (DELM SP)  BUY (maintained)

3Q16 Results: Turnaround continues in a challenging quarter accompanied by one-off related expenses 

Company	Share price(S$)	Recommendation	Our Target Price(S$)	Within Expectation (Y/N)	Highlights of Results
Del Monte Pacific	0.395	BUY	0.69	Below	See attached comments

DELM SP 3QFY16 

 

• Revenue below our expectations (5-10%).  Sales for the quarter was down 6.8% over the prior year period driven by lower sales in the USA due to unsuccessful USDA government and OEM co-pack contract bids. The USDA government contracts are a low margin non-core business for Del Monte. The company was outbid by competitors who priced their bids very aggressively near to cost price. Market share in the core business of retail centre store of fruit, vegetable and tomatoes remains stable. Sales in the Asia Pacific came in strong at 9% higher yoy. The value of the USDA lost contract is very volatile and was worth about US$40m this quarter.
• Operating profit improved.  The group achieved an operating profit of US$24.5m which was 4.7% higher than versus the US$23.4m operating income last year due to strong operating results across Asia. Sales in Asia Pacific was up 9%.
• Gross margins improving.  Gross margins were up in 3Q16 to 20.5% vs 19% for the same quarter last year. The US operations has plans to move away from the lower margin USDA government contracts which will be positive for gross margins moving forward.
• Non-recurring items.  For 3Q16, the group recorded higher than expected non recurring expenses of US$12.5m on a pre-tax basis against a non recurring gain of US$17.9m for 3Q16. This was due to the existence of higher than expected SAP related costs of US$7.1m and other acquisition related charges of US$5.4m.
• Net profit below our expectations.  3Q16 reported net profit was US$0.6m better than the loss of US$2.2m last year. The group continues to face acquisition integration charges and SAP related expenses which we now expect to persist into FY17.
• Perpetual preference shares.  Del Monte expects to launch the preference shares in CY2016 subject to regulatory approval and market conditions. The pricing is expected to be in the range of 5.5% to 7%. We now expect it to happen sometime early FY17.
• Plans going forward.  Move away from volatile revenue streams such as the USDA government contract bids and move into stable revenue sources. Such as the continued focus on the core retail centre store business and to build food service businesses such as restaurant deliveries.
• Valuation.  We maintain our  BUY  recommendation with a PE-based target price of S$0.69/share (under review) pending a management meeting.

 

 

In black but market dont like it.........

 

If drop back I will hoot haha. This level still not that appealing

halleluyah      ( Date: 14-Mar-2016 09:11) Posted: most likely go back to 30c....

 

Don' t think so.....the results were not bad.  They are still profitable and will continue to do so... maybe there was some speculation.

Cheers,

 

halleluyah      ( Date: 14-Mar-2016 09:11) Posted: most likely go back to 30c....

 

most likely go back to 30c....

 

For more concern is price up on next week?

happyboy588      ( Date: 12-Mar-2016 20:52) Posted: Ya I agree with you , what I am saying is the company need more time to digest. ken777      ( Date: 12-Mar-2016 16:14) Posted: Expanding fast it not a bad thing . It will show that the company have high PE ratio and make it more attractive than current. Look at the PE ratio for Amazon, look at Netflix . Company that have the ambition to expand will generally have a brighter prospect. Lastly look at alibaba expanding rate. Current market situation it the best time to acquire and expand.

 

Ya I agree with you , what I am saying is the company need more time to digest.

ken777      ( Date: 12-Mar-2016 16:14) Posted: Expanding fast it not a bad thing . It will show that the company have high PE ratio and make it more attractive than current. Look at the PE ratio for Amazon, look at Netflix . Company that have the ambition to expand will generally have a brighter prospect. Lastly look at alibaba expanding rate. Current market situation it the best time to acquire and expand. happyboy588      ( Date: 12-Mar-2016 13:45) Posted: actually I am also a bit disappointed by the result . but look at his peers . US fresh Del monte , they report lost in 3rd quarter. which make me not quite surprised that it's USA sales drop. and these years Del monte expanded too fast . I am pretty sure a lot issues will be coming on the way . and management already out key personal to look at these issues. so let's look at the bright side . by acquiring US company make its brand more attractive and reputable in Asian market . you can see from the report. the sale up quite a lot in Asian market . so everything got its pros and cons. just don't expect too much .

 

Expanding fast it not a bad thing . It will show that the company have high PE ratio and make it more attractive than current.

Look at the PE ratio for Amazon, look at Netflix . Company that have the ambition to expand will generally have a brighter prospect. Lastly look at alibaba expanding rate. Current market situation it the best time to acquire and expand.

happyboy588      ( Date: 12-Mar-2016 13:45) Posted: actually I am also a bit disappointed by the result . but look at his peers . US fresh Del monte , they report lost in 3rd quarter. which make me not quite surprised that it's USA sales drop. and these years Del monte expanded too fast . I am pretty sure a lot issues will be coming on the way . and management already out key personal to look at these issues. so let's look at the bright side . by acquiring US company make its brand more attractive and reputable in Asian market . you can see from the report. the sale up quite a lot in Asian market . so everything got its pros and cons. just don't expect too much .

 

actually I am also a bit disappointed by the result . but look at his peers . US fresh Del monte , they report lost in 3rd quarter. which make me not quite surprised that it's USA sales drop. and these years Del monte expanded too fast . I am pretty sure a lot issues will be coming on the way . and management already out key personal to look at these issues. so let's look at the bright side . by acquiring US company make its brand more attractive and reputable in Asian market . you can see from the report. the sale up quite a lot in Asian market . so everything got its pros and cons. just don't expect too much .

 

  

  

  

  

  

 

Looking at EBITDA is more relevant, especially since it is making good progress in restructuring its loans into perpetual PS. It is making about US$50M in EBITDA for 3rd quarter, which is quite good.

-----------------------

The Group posted an EBITDA of US$174.3 million and a net income of US$41.9 million in the ninemonth period, inclusive of one-off favourable adjustments of US$23.4 million after tax mainly due to DMFI&rsquo s retirement plan amendment in the second quarter, a turnaround from the US$23.9 million loss position last year. 

For the third quarter, the Group reported an EBITDA of US$43.9 million and a net income of US$0.6 million, inclusive of one-time expenses of US$6.9 million after tax, continuing the improved profitability achieved in the second quarter. 

 

 

 

 

 

2q net profit $53.3m vs 3q $0.6m......mgt say on 2q that 3q will be better due to festive season...wakao.......dont tell mi 4q going into red again.......

 

Good ! Improving 

From I3investor.

Del Monte Pacific returns to the black in 3Q

Source:  TheEdge Markets     |     Publish date:  Fri, 11 Mar 2016, 05:35 PM     |       > > Read article in News website  SINGAPORE (March 11): Del Monte Pacific has swung back into the black with earnings of US$590,000 ($812,187) in the third quarter ended Jan 31, 2016, from a loss of US$2.2 million a year ago. The F& B company' s gross margin in the third quarter improved to 20.5% from 19.2% , due to the absence of purchase accounting inventory step up, significant improvement in productivity as well as cost optimisation initiatives.

Composure      ( Date: 11-Mar-2016 17:35) Posted: not good? http://www.delmontepacific.com/Storage/file/pdf/quarterly_results/DMPL_3QF16_PressRelease_FINAL.PDF edwinjup      ( Date: 11-Mar-2016 17:33) Posted: Wakao..3q result look lousy....xxxx