SOURCE: Inquirer
Philippines Del Monte Pacific Ltd. (DMPL) is expected to remain profitable in fiscal year 2027, relying on its Asian operations and restructuring efforts despite cost pressures and a heavy debt load.
On Tuesday, the food and beverage company said its underlying business remained strong even as the operating environment continued to be challenging.
It expects targeted operational improvements and a “disciplined restructuring plan” to support long-term growth.
DMPL entered fiscal year 2027 on stronger footing. Net profit from continuing operations nearly tripled to $16.1 million in the quarter ended July from $5.5 million a year earlier.
Sales grew 9 percent to $222.1 million, driven by international markets, while earnings before interest, taxes, depreciation and amortization (Ebitda) climbed 25.7 percent to $49.3 million.
Gross margin improved to 33.7 percent from 32.5 percent.
The improvement came despite softer domestic demand. Philippine sales reached $82.6 million, up 2.2 percent in peso terms but down 6.9 percent in dollar terms due to peso depreciation.
DMPL said measured price increases supported local sales, although volumes in its core segments remained soft as consumers felt the impact of economic volatility.
International sales, meanwhile, jumped 21.4 percent to $118 million on higher volumes of fresh pineapple, packaged products and not-from-concentrate juice.
The company maintained a 54-percent share of the imported fresh pineapple market in North Asia.
Still, DMPL faces significant financial challenges. The $703-million write-down of its US business at the end of fiscal year 2025 left the group with negative equity of about $579 million as of July.
Its net debt stood at $969.7 million, down 5 percent year on year due to loan repayments.
DMPL’s net debt-to-adjusted Ebitda improved to 5.1 times from 6.9 times. Its net capital deficit also narrowed by $11.3 million to $578.5 million from the end of April.
To address its balance sheet, DMPL has started integrated restructuring discussions with its principal creditors and other stakeholders, with external financial advisers helping develop a framework.
The plan seeks to address near-term liquidity and maturity pressures, strengthen Del Monte Philippines Inc.’s (DMPI) balance sheet and cash-generating capacity, and establish a sustainable capital structure.
Management acknowledged that DMPI’s performance alone would not be enough to address the group’s $1.2 billion in total liabilities and DMPL’s negative equity. It likewise said a single equity raise would not be sufficient.
Instead, DMPL expects a combination of debt restructuring, operational initiatives, asset monetization, shareholder support and other capital measures.
The group is also exploring divesting certain assets to simplify its structure and generate liquidity.