Del Monte Philippines, Inc. (DMPI) generated sales of P7.4 billion in the first quarter ending July 2020 as reported in the company's SEC filing. Close to two-thirds of DMPI's sales are in the Philippines and the balance in the international market.
Sales in the Philippines grew by a commendable 18% to P4.5 billion, versus P3.8 billion in the same period in 2019. The higher revenue demonstrates Del Monte's brand strength and solid fundamentals amidst the current health and economic environment. This robust performance offsets lower international sales of P2.4 billion. As a result, total DMPI sales were in line with last year, a proof of the company's resilience. In the month of July, international sales' decelerated, better than the first two months, showing encouraging signs of restoring its path to growth.
DMPI's operating income in the first quarter surged 27% to P1.4 billion with higher sales and improved sales mix in the Philippines, lower costs, better margins and controlled operating expenses. The company maintained its net income at P0.9 billion, comparable to last year, holding its ground amidst the current health and economic situation.
The company improved sales across all categories in the Philippines: culinary, beverages and fruits, led by Spaghetti Sauce, Quick 'n Easy Meal Mixes and Pineapple Juice.
Consumers turned to the Del Monte brand and cooked more meals at home with the company's healthy culinary products, supported by Del Monte Kitchenomics' meal preparation. And with the brand's 100% Pineapple Juice rich in vitamin C, they helped strengthen the immunity of the buyers.
The company's performance in the Philippines was driven by retail channels which rose 32%. This offsets the weak food service channel which shifted its focus to e-commerce and community delivery services, partially recouping declines caused by restaurant closures during the lockdown.
DMPI has been in operation in the Philippines for 94 years and is one of the market leaders in canned pineapple and mixed fruit, canned and Tetra ready-to-drink juices, tomato sauce and spaghetti sauce categories, under its iconic Del Monte brand. The company is one of the largest food and beverage companies in the Philippines. DMPI operates an integrated 26,000-hectare pineapple plantation in Bukidnon, one of the largest in the world.
Majority of DMPI's international sales are generated in its S&W branded business in Asia and the Middle East. Sales were down in the first quarter as higher sales of shelf-stable packaged products were offset by lower sales of fresh pineapples in China. Fresh pineapples sold through the food service channel - restaurants, hotels and airlines – were impacted. With fresh sales in the month of July recovering with a lower rate of decline, the company expects its fresh business to expand in the remainder of the year and improve its margins with cost management and operational efficiencies.
DMPI's growth momentum, led by the Philippine market in the first quarter of its financial year, attests to its strong fundamentals as a food company supported by the strength of its brand and trusted products, offering health and wellness to consumers. Del Monte Philippines is positioned to grow with its nutritious, long shelf-life products which enable consumers to prepare more meals at home and nourish themselves.
This article relates only to the financial results of Del Monte Philippines, Inc. and does not reflect the financial position of Del Monte Pacific Ltd.
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