Del Monte Pacific (D03) Q1 2025 earnings summary

Executive summary

• Group sales grew 4% to $537m in 1Q FY2025, led by strong international and Philippine sales, with DMPI posting a 52% net profit increase and a 13% sales rise in peso terms.

• Group net loss was $34m, mainly due to high costs from prior US production and higher interest expense, but the loss was over 50% lower than 4Q as gross margin improved to 16%.

• Recovery in the Philippines was driven by new leadership, increased marketing, and operational improvements.

• U.S. operations faced headwinds but saw stabilization in core categories and growth in Joyba Boba tea.

• Americas sales were flat, Asia Pacific ex-Philippines up 16.9%, and Europe up 81%.

Financial highlights

• Turnover rose to $536.9m from $516.7m year-over-year; DMPI reported PHP 77.2 million in sales, 13% higher than last year.

• Gross profit fell to $87.6m from $108.3m, with gross margin down to 16.3% from 21.0%.

• EBITDA dropped to $31.9m from $51.1m; net loss widened to $34.2m from $13.1m.

• Net debt reduced to $2,226.2m from $2,299.7m due to better inventory management.

• International sales grew 20% year-over-year, led by fresh fruit exports to China, Korea, and Japan.

Outlook and guidance

• Philippine business expects continued strong performance, with further marketing investments and new product launches planned through FY 2028.

• U.S. business anticipates margin improvement in the second half of FY 2025 and significant benefits in FY 2026 as high-cost inventory is cleared and cost reductions take effect.

• Plans for selective US asset sales and equity injection via strategic partnerships to lower leverage.

• Full financial impact of initiatives expected in FY2026; FY2025 net loss anticipated but lower than FY2024.

• Fresh pineapple exports expected to grow at mid- to high double-digit CAGR through FY 2028.