Del Monte Pacific

[cyclone]

Del Monte Pacific’s Second Quarter FY2020 Results

Highlights :
* Positive outcomes backed by strong sales growth in fresh pineapple in North Asia, increased sales in the Philippine market, and transformational initiatives at US subsidiary
* Maintaining solid market share across legacy categories, while expanding into other new growth categories and channels
* Gross profit, gross margin, recurring EBITDA and net profit recorded significant improvement
* Without one-off expenses, operating profit increased by 65% to US$47.2m while net profit more than doubled to US$15.9m
* Planned one-offs, mainly non-cash, attributed to US plant closures/sale in line with assetlight strategy, led to a net loss of US$37.4m, with expected immediate and ongoing savings of US$50-60m over the next 24 months.

More details in :
1. https://links.sgx.com/FileOpen/2__DMPL_2...eID=589669
2. https://links.sgx.com/FileOpen/1__DMPL_2...eID=589668
3. https://links.sgx.com/FileOpen/3__DMPL_2...eID=589670

DMPL today closed at S$0.14 (+0.001), up 0.75%

[karlmarx]

Liquidity has returned to financial markets, but recent issues show that the cost for borrowers with weaker balance sheets or unattractive businesses are much clearly higher than before the pandemic.

https://links.sgx.com/FileOpen/DMPL%20-%...eID=611226

So DMPL has a large share of the US and Philippines canned fruit and vegetables market, and is an old and familiar brand name to consumers. But changing consumer preferences mean that selling prices have to be constantly low(er) for its value proposition to be attractive to consumers. Yet, the heavy debt burden and high(er) financing costs has been setting back whatever thin margins the business is making. In the years to come, DMPL may be in a worse financial position if these trends do not reverse.

If that is the case, the pricing of its recently refinanced debt may not be too high after all.

[¯|_(ツ)_/¯]

eAGM 17 Sep 2020@10:30am
(click to reg b4 14/9/2020)
https://links.sgx.com/FileOpen/1.%20Anno...eID=629649

Stay home and stay safe, everyone.

[¯|_(ツ)_/¯]

Response to shareholders questions
There are really passionate shareholders who asked very good questions.
Worth a read and learn something new about Del Monte.

FY2020 Interest rate   7.6%
FY2021F Interest rate 11.1%

NP 2.3%

Our business has been favourably impacted by the pandemic as consumers turn to trusted brands, shelf-stable and culinary products suited for home cooking. Our sales in the USA surged 62% in the fourth quarter of FY2020, while Philippines improved by 14.5%.
https://links.sgx.com/FileOpen/Response%...eID=632051
(eAGM materials)

Stay home and stay safe, everyone.

[¯|_(ツ)_/¯]

Del Monte Pacific Limited will announce the Group's 1Q FY2021 (May - July 2020) results this Wednesday, 23 September 2020, after market closes.
https://links.sgx.com/1.0.0/corporate-an...5937d8b81c

Stay home and stay safe, everyone.

[¯|_(ツ)_/¯]

Del Monte @ 42

FY2021 Result as at 30 Apr 2021
Rev USD2b  (vs 2b)
GP  USD555m (vs 452m)
NP  USD 63m (vs -81m)
Div USD0.012 (vs 0.0154)

The Group has been exploring e-commerce opportunities for its range of products across markets.
Barring unforeseen circumstances, the Group expects to generate higher net profit in FY2022 building on the momentum in FY2021.
https://links.sgx.com/FileOpen/DMPL_4QFY...eID=672083


Stay home and stay safe, everyone.

[specuvestor]

Another perpetual value trap unless you got out in 2021... good branding and premium yet

https://www.straitstimes.com/business/co...bankruptcy

Looks like biz slowly turning around and EBITDA cashflow in 4Q of about US$63m with cash interest expense of US$23.4m and capex of $23m, while working capital continue to tighten. They still looking to issue the $360m perpetual pref shares but lowering expectations to US$250m first and within 3 years another US$110m

Agree very little room to reduce debt hence the debt to pref share swap

Del Monte is an interesting LBO case study for me which I didn't buy any tickets for the show.

Capex has been about halved and cashflow is hand to mouth with inventories shrunk in 3Q (end Jan as per new fiscal year). Pending the US$360m preferred perpetual to be issued in Phil which is taking longer than I expected. The LBO US biz surprisingly dipped.

They should really reward their CFO

If EBITDA stays, the ratio of debt/EBITDA is meaningless. I am taking the debt/EBITDA as an indicator, on the growth needed to clear the debt... The integration is still going-on, and synergy is the hope...

(not vested)

EBITDA can only cover interest expense means debt is not going to be repaid. Hence debt over EBITDA is just a ratio and meaningless. Unless they can swap debt for equity and cut capex it will be brinkmanship for some time, until biz improves

This is an LBO. Group EBITDA of US$21.5m can't even cover interest expense of US$23.9m is indeed worrisome with cash of just US$28.5m. Cash call have to come sooner rather than later.