Del Monte Pacific reported Thursday its fiscal third quarter net profit fell 14 percent on-year to US$25.93 million as profitability was hit by higher commodity and transportation costs.
Turnover for the three months ended 31 January rose 4.9 percent on-year to US$659.42 million on higher sales in the U.S. and higher fresh pineapple exports, the food and beverage producer said in a filing to SGX.
The U.S. subsidiary, Del Monte Foods Inc. (DMFI) posted a 6 percent on-year increase in sales for the quarter to US$468.4 million on higher branded retail primarily canned vegetable and fruit which more than offset the planned reduction of low-margin private label.
“Del Monte canned vegetable, which had the highest contribution to branded retail sales, saw a 4 percentage 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,” the company said.
For the nine months ended 31 January, Del Monte Pacific reported net profit rose 64.2 percent on-year to US$80.06 million on turnover of US$1.77 billion, up 6.5 percent on-year.
“Cost headwinds in the third quarter were quite significant impacting margins and profits,” said Joselito Campos, Jr., Del Monte Pacific’s managing director and CEO, in the statement.
“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,” Campos added.