Del Monte Pacific Limited
Del Monte’s preferred shares offering gets green light from SEC

DEL MONTE Pacific Limited (DMPL) has secured the green light from the Securities and Exchange Commission (SEC) to proceed with its $160-million preferred shares offering.

In a disclosure to the stock exchange on Wednesday, the listed canned fruits manufacturer said it has received the corporate regulator’s approval for the offering of the second tranche of its dollar-denominated shares last Tuesday.

The offer is comprised of 16 million Series A preferred shares priced at $10 apiece.

Proceeds of the issuance will be used to finance the balance of its $154-million bridge loan facility from BDO Unibank, Inc., which DMPL used for the acquisition of the consumer food business of Del Monte Foods, Inc.

DMPL looks to offer the shares from Nov. 27 to Dec. 8, with listing slated for Dec. 15, according to an earlier disclosure.

DMPL tapped BDO Capital & Investment Corp. as the sole issue manager for the offer.

The company had filed a registration statement with the SEC allowing it to issue Series A preference shares in tranches within three years from March 21, 2017.

Earlier this year, DMPL issued the first tranche of the offer consisting of 20 million series A preferred shares, tagged as “Series A-1 preference shares.” The stocks were listed on the main board of the Philippine Stock Exchange last April 7

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...pwede na kayang accumulate 'to?

Del Monte Pacific maps turnaround plan

DEL MONTE Pacific Ltd. (DMPL) mapped out a turnaround path for the company as it made a pitch to investors for its second tranche of US dollar-denominated shares that are on offer through Dec. 8.

Luis F. Alejandro, DMPL general manager and chief operating officer, said the most important factor for investors to look at is the organization’s new make up.

“We have a new CEO, new  CFO, new supply chain head, we have a new sales head and up and coming very soon in the next couple of months would be a chief marketing officer,” he said in an interview at the company’s headquarters at Bonifacio Global City on Tuesday.

DMPL is offering the Series A-2 preferred shares with an oversubscription option of up to 8 million. The shares have a par value of $1 each and an issue price of $10 per share.

The shares have a dividend rate of 6.5% per annum.

The funds raised from the offering will be used mainly to pay the balance of a $154 million loan from BDO Unibank, Inc.

“So we have overhauled the leadership team after two years because only in doing so, can we at least increase our chances of fast turnaround,” Mr. Alejandro said.

Turning the business around, he said, boils down to the company’s leadership and management.

“So I think in that perspective, that’s the most important development that has happened in the past six months,” the DMPL executive said. “With the right leadership you exactly know what will happen.”

Mr. Alejandro also said the company hired consultants on how the company could further downsize its operations in the US.

“For the US, they have given us some good guidance on how we can downsize, and with downsizing the operation, we will be more competitive in our pricing and the same time, we’ll have more cash that we can put into profit and put into marketing spending that will further drive volume, revenue and therefore profit,” he said.

Parag Sachdeva, DMPL group chief financial officer, said the company would be on an “investment mode” for this year and next.  

“We would be investing more than the usual in consumer and trade activation programs so that we can really accelerate in a declining category,” he said, referring to canned fruits, which have been overtaken by consumer preference for fresh fruits.

“This will require us to really invest, which will mean that profit performance in the next couple of years may be either flat or might even decline. That would lead to rebuilding the profit story in the next two or three years,” Mr. Sachdeva said.

“We are investing an incremental 3% of sales in driving the top-line growth,” he said, pointing out that the move would be for the company’s US business.

Asked to describe the size of the US operations as against the total, Mr. Sachdeva said: “I think it’s around 75%. It’s a big component from a sales perspective. But from a profit perspective, our Asian operation contributes more than 50% to the profitability of the company. We do expect the US to start contributing bigger from a profitability perspective in two to three years time.”

For full-year results ending in April 2017, DMPL reported sales of $2.3 billion, down 0.9%, largely because of lower US sales.

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...kaya pala may turnaround plan na press release nung isang araw Big Grin

Del Monte Pacific swings to net loss as revenues from US operations decline

DEL MONTE Pacific Limited (DMPL) swung to a net loss in the three months ending October 2017, weighed down by lower sales recorded by its unit in the United States.

In a presentation to analysts released Wednesday, the country’s largest canned fruits manufacturer reported a net loss attributable to the parent of $2.8 million, against an attributable profit of $19.97 million in the August to October period in 2016. 

This figure includes one-off expenses after tax amounting to $13.1 million, from its divestment from Sager Creek vegetable business, the shutdown of its production facility in Siloam Springs, Arkansas, and the shutdown of a tomato production facility in Plymouth, Indiana. 

Excluding one-off items, DMPL’s attributable profit stood at $10.24 million, still lower than the $20.82 million in the same period last year. 

DMPL blamed the losses to a 1.8% decrease in revenues to $624.7 million, due to lower sales of its US subsidiary Del Monte Foods, Inc. (DMFI), which account for 78% of the group’s total sales or $485.6 million. 

“We have taken some challenging but necessary steps in the US to realign our manufacturing footprint and strengthen our competitiveness in the long-term, amidst shifts in consumer tastes and shopping preferences,” DMPL Managing Director and Chief Executive Officer Joselito D. Campos, Jr. was quoted as saying in a statement.

Despite the decrease in sales, the company said it managed to widen its market share in the canned fruit and plastic fruit cup categories by 3% during the quarter. 

“We have also invested in brand-building to support our heritage brands in the United States and reinvigorate the categories we are in, while forging ahead with innovative products and entering new channels,” Mr. Campos said. 

On the other hand, Del Monte Philippines, Inc. saw its sales increase by 4% in peso terms, but down by 2.9% in US dollar terms due to the weakening of the peso. This includes sales in the Philippine market as well as exports. 

“Sales growth was driven by expanded penetration and increased consumption of its packaged pineapple fruit following improvement in supply,” the company said. 

On a six-month basis, DMPL recorded a net loss attributable to the parent of $2.08 million, against the $12.92-million attributable profit it recorded in the six months ending October last year. Sales, meanwhile, were down by 0.4% to $1.1 billion. 

Excluding the one-off expenses due to plant closures, DMPL noted it would have delivered a net income of $11.5 million. 

Amid losses for the first half of its fiscal year (FY) 2017, DMPL said it expects to make a profit in 2018. 

“Barring unforeseen circumstances, the group is expected to be profitable for FY 2018 on a recurring basis,” the company said. 

The company is currently offering $80 million Series A-2 Preference shares with an oversubscription option of up to $80 million as part of its fund-raising activities. The issuance has an annual coupon rate of 6.5%, and will be offered until Dec. 8, with listing on the PSE slated form Dec. 15. 

This issuance follows DMPL’s $200-million offering of preferred shares last April. 

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...nauuso na yata preferred shares?

Del Monte Pacific raises $100M from preferred shares offer

DEL MONTE Pacific Limited (DMPL) said it has completed its offering of Series A-2 preferred shares last Friday, raising $100 million in the process.

The country’s largest canned fruit manufacturer disclosed its preferred shares issuance, with a base size of $80 million and oversubscription option of $80 million, was oversubscribed by two million shares at the end of its offering date.

“The offering generated a total amount of $100 million, which includes $20 million from the oversubscribed shares,” DMPL said in a statement.

DMPL plans to use the proceeds of the offer to pay the outstanding bridge loan facility it secured from BDO Unibank, Inc., which will mature in February 2019. The company added the offering will also help the company strengthen its balance sheet. The shares will have annual coupon rate of 6.5%.

The company targets to list the shares on the main board of the Philippine Stock Exchange (PSE) on Dec. 15 under the ticker DMPA2.

This is the second tranche of DMPL’s shelf listing of up to 36 million Series A preference shares approved by the Securities and Exchange Commission and PSE. DMPL managed to raise $200 million in the first tranche of the offer last April, which also marked the first time dollar-denominated securities were listed on the local bourse.

DMPL tapped BDO Capital and Investment Corp. and China Bank Capital Corp. as joint lead underwriters for the offer, while BDO Capital acted as sole issue manager and sole bookrunner. 

The listed firm swung to a net loss attributable to the parent of $2.08 million in the six months ending October, from an attributable profit of $12.92 million in the same period in 2016. Slower sales from its unit in the United States weighed down the company’s profit, which account for 78% of the group’s total sales.

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Del Monte Pacific swings into the red with US$38.4m Q3 loss

FOOD and beverage company Del Monte Pacific on Thursday reversed into the red for the third quarter on one-off expenses related to its plant closures in the US, and the write-off of deferred tax assets.

For the three months ended Jan 31, 2018, the group incurred a net loss of US$38.4 million, compared to a net profit of US$8.5 million last year.

Loss per share came in at 2.20 US cents for the quarter, from an earnings per share of 0.44 US cent for fiscal 2017's third quarter.

This quarter's net loss included US$41.8 million of one-off expenses (net of tax), as Del Monte continued the shutdown of its tomato production facility in Plymouth, Indiana, and wrote off deferred tax assets.



On May 15, NutriAsia Pacific Limited acquired 41,509,769 shares of Del Monte Pacific for a consideration of S$8.30 million, taking its direct stake in the stock from 59.41 per cent to 61.55 per cent. This saw Del Monte Pacific executive director Joselito D Campos, Jr's total stake in Del Monte Pacific rise from 69.56 per cent to 71.70 per cent. The NutriAsia Group of Companies is a major food conglomerate in the Philippines, where Mr Campos also serves as chairman and CEO.

Del Monte’s 2017 profit hit P2.6b slightly lower than previous

Del Monte Philippines Inc., one of the largest food and beverage companies in the Philippines that plans to conduct an initial public offering, reported a net income of P2.6 billion for its financial year ending April 2018, slightly lower than a year ago on higher interest expense.

DMPI said in a disclosure to the stock exchange revenues rose 3.4 percent to P27.6 billion, about two-thirds of which were sales to the domestic market.

Sales in the Philippines climbed 6.7 percent to P16.9 billion, offsetting the marginal 1.9-percent decline in export sales to P10.6 billion.

DMPI is expected to post higher net income in the current year as the company is poised to reduce borrowings and interest expense through better collection from receivables.

“While DMPI’s net debt to equity ratio is only 0.7x, the company will reduce its gearing, strengthen its balance sheet further and improve its bottom line,” the company said.

The company also expects the domestic market to continue to deliver higher profits and exports to improve from better sales mix with higher fresh pineapple sales under S&W, and increased margins from pricing, cost management, and operational efficiencies.

DMPI, which has been in operation in the Philippines for over 90 years, is the market leader in the canned pineapple and mixed fruit, canned and Tetra ready-to-drink juices, tomato sauce and spaghetti sauce categories under its iconic Del Monte brand. 

DMPI, which plans to raise P13.5 billion in an initial public offering, earlier deferred the maiden share offering due to the volatility in the stock market.

DMPI did not provide a new timetable for the share sale.

The company plans to sell 587.437 million in secondary shares at a price of between P18 and P23 per share.

It plans to use the net proceeds from the offering to partially repay certain loans extended by parent company Del Monte Pacific Ltd. and refinance financial obligation of the DMPL group to significantly reduce its leverage position.


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