Del Monte Pacific Ltd. said it reduced its net loss to $13.1 million in the quarter of fiscal year ending July 31, 2023, from $30.5-million loss in the same period last year.
DMPL said in a disclosure the stock exchange Thursday the company continued to post losses as result of lower gross profit and increased interest expense.
“Our margins were under pressure with inflation while interest rates rose, affecting the group’s bottom line,” said DMPL managing director and chief executive Joselito Campos Jr.
Gross profit declined 18 percent to $108.3 million, with a gross margin of 21 percent. inflationary factors increased the group’s product costs.
DMPL implemented a price increase in July on elevated raw material and higher overhead costs. It also carried out a number of cost savings initiatives to restore margins, whose impact will be felt in subsequent quarters
“We are determined to bring margins up in the second half of our fiscal year through a combination of price adjustment and cost reduction, including minimizing waste further by continuously improving processes, and leveraging technology to enhance efficiency and lower expenses. Reducing leverage and interest expense is a key imperative and we are exploring all options to strengthen our capital structure,” Campos said.
Sales from the domestic market reached $75.9 million, up 5 percent in peso terms but flat in US dollar terms due to the peso depreciation.
Sales of packaged fruit, beverage and culinary were higher which resulted in increase in the company’s market leadership shares in core categories of packaged pineapple, mixed fruit, beverage, tomato and spaghetti sauces.
International sales also went up by 23 percent, driven by increased sales of premium higher-margin S&W Deluxe fresh pineapples as well as better pricing.
DMPL said it would remain vigilant in managing operating expenses which include packaging materials optimization; power and fuel initiatives; investments to improve efficiency, productivity and minimize wastage, and product bundling initiatives in distribution centers.
The company is embarking on a strong debt reduction program by using internally generated cash for debt repayment. It is also considering the issuance of appropriate equity instruments in order to increase its capital.
“Barring unforeseen circumstances, the group expects to generate a higher net profit in FY2024 especially in the second half of the fiscal year,” DMPL said.