Del Monte Pacific

Del Monte Pacific: For the transition period between Jan-Apr’14, a net loss of US$42.8m was incurred, reversing profit of US$6.6m, mainly due to one-offs relating to the purchase of Del Monte Foods which was completed on 18 Feb’14. Excluding US$46.7m non-recurring items, adjusted profit would have been US$3.8m. Consolidated revenue grew three-fold to US$379.2m, of which US$292m was contributed by Del Monte Foods (DMF). Zooming in to Asia Pacific operations, revenue fell 24.2% on weaker Philippines sales, offset by strong S&W sales. Gearing has increased from 67.2% to a hefty 746.3%. In a note by MKE last year, management indicated that the near term focus will be on paring down debt, as such payout will likely be 33% instead of 75% in previous years. Management expects to generate higher recurring earnings in FY15 as it drives sales and optimizes synergies. DMP is currently trading at approx. 2.5x P/B