By James A. Loyola

Del Monte Pacific Limited reported a net income of $3 million for the first quarter of fiscal year (FY) 2019 ending July, higher than the $0.7 million in same period last year.

The firm disclosed to the Philippine Stock Exchange that this was the result of the one-off gain from the purchase of DMFI loans at a discount in the secondary market.

Excluding one-off items of $6.8-million post-tax, the Group would have incurred a net loss of $3.7 million versus a profit of $1.2 million in the prior year period.

This is due to lower sales in the US, lower exports of processed pineapple, significantly reduced PJC (pineapple juice concentrate) prices and higher product costs that were partly offset by price increase in the Philippines and lower trade spend in the US.

The Group generated first quarter sales of $437.2 million, 8 percent lower than prior year quarter mainly due to lower sales in the USA and lower exports of processed pineapple products.

DMFI contributed $308.3 million or 71 percent of Group sales.

DMFI sales declined by 8 percent due to lower volume across categories, most significantly branded tomato products and private label, as well as lower pricing in foodservice for PCJ.

The decline in sales was in line with DMFI’s strategy to deprioritize non-profitable businesses including private label.

DMFI’s market shares in canned vegetable and fruit, and fruit cup snack categories increased during the quarter, driven by compelling innovations, strong execution against fundamentals at retail, and sustained marketing investment to support its brands.

As part of its strategy to improve operational efficiency and profitability, DMFI divested its underperforming Sager Creek vegetable business in fiscal year 2018.

DMFI booked additional one-off expenses of $8.4 million in the first quarter of FY2019, mostly for Sager Creek.

Sales in the Philippines domestic market were flat in peso terms and down 5.3 percent in US dollar terms due to peso depreciation.