Del Monte Pacific Ltd. 2Q & 1H FY2026 Results Analysis: Strong Growth Momentum Post-U.S. Deconsolidation
Del Monte Pacific Limited (DMPL) delivered robust results for the second quarter and first half of FY2026, marking a clear acceleration in growth and profitability driven by its core Asian and international operations. Effective 1 May 2025, the company’s U.S. business was deconsolidated, providing a new baseline for evaluating DMPL’s ongoing performance.
Key Financial Metrics
| Metric |
2Q FY2026 |
1Q FY2026 |
2Q FY2025 |
YoY Change |
QoQ Change |
| Revenue (US\$m) |
234.9 |
203.7 |
213.7 |
+9.9% |
+15.3% |
| Gross Profit (US\$m) |
80.4 |
66.2 |
58.9 |
+36.5% |
+21.5% |
| Gross Margin (%) |
34.2 |
32.5 |
27.6 |
+6.6 pts |
+1.7 pts |
| EBITDA (US\$m) |
51.5 |
39.2 |
37.0 |
+39.2% |
+31.4% |
| Net Profit (US\$m) |
16.8 |
5.5 |
2.3 |
+631.6% |
+205.5% |
| Net Margin (%) |
7.2 |
2.7 |
1.1 |
+6.1 pts |
+4.5 pts |
| Net Debt (US\$m) |
994.9 |
994.9 |
1,044.9 |
-4.8% |
0% |
| Net Debt/EBITDA (x) |
6.1 |
7.5 |
8.3 |
-2.2x |
-1.4x |
| Operating Cash Flow (US\$m) |
85.9 |
76.8 |
121.7 |
-29.4% |
+11.9% |
| Dividend |
Not disclosed |
Not disclosed |
Not disclosed |
– |
– |
Historical Performance Trends & Key Highlights
- Revenue and Profitability: 2Q FY2026 revenue grew 10% year-over-year, with net profit surging over 6x, reflecting improved sales in the Philippines and international markets, better pricing, and enhanced operational efficiency.
- Margin Expansion: Gross margin rose sharply to 34.2% (from 27.6%) due to higher yields from the C74 pineapple variety, lower cannery and plantation costs, and favorable climate conditions.
- Balance Sheet: Net debt decreased to US\$994.9m from US\$1,044.9m, largely attributed to continued loan repayments.
- Cash Flow: Cash flow from operations dipped due to strategic inventory buildup ahead of peak season, yet remains robust.
- Deconsolidation Impact: The U.S. business was deconsolidated effective 1 May 2025. The current results reflect only continuing operations, providing a clean view of the company’s Asian and international performance.
Business Segment & Market Update
- Philippines: Sales rose 9% in peso terms (7% in USD), driven by higher demand for packaged pineapple, mixed fruits, and RTD juices. Del Monte sustained market leadership across core categories including fruits, spaghetti sauce, and ready-to-drink juices.
- International: International sales grew 7% YoY, led by a 23% surge in fresh pineapples, 49% in NFC juice, and 21% in frozen pineapple. Market leadership was maintained or expanded in North Asia, especially China and Japan.
Exceptional Items and Strategic Moves
- U.S. Business Deconsolidation: This major restructuring step, in line with IFRS 10, reset DMPL’s financial baseline, isolating legacy losses and asset impairments from the U.S. business.
- Impairments & Capital Structure: The company’s negative net debt/equity ratio resulted from capital deficiencies related to U.S. business impairments and asset write-downs at FY2025 year-end. DMPL aims to raise equity to reduce leverage and offset the deficit.
- Sustainability Initiatives: The Extended Producer Responsibility (EPR) program achieved significant recycling rates (51% rigid plastic, 42% flexibles) and the company remains on track to reach its 50% recycling target by year-end.
Strategic Priorities & Outlook
- Focus remains on maximizing growth in Asian operations, reinforcing market leadership in beverages, culinary products, and packaged fruit, and launching new products in adjacent segments.
- Internationally, DMPL will defend its leadership in fresh pineapples in North Asia, while operational initiatives target a 15%+ yield improvement in the C74 pineapple variety.
- Cost management will be proactive, with continued efforts to reduce waste, inventory write-offs, and leverage.
- The company expects to be profitable in FY2026, barring unforeseen circumstances.
Conclusion & Investment Recommendation
Overall Assessment: Del Monte Pacific’s financial performance is strong, with clear evidence of top- and bottom-line growth, margin expansion, and solid execution in its core Asian and international businesses. The deconsolidation of the U.S. business—removing a source of prior losses—has provided a clean base for future growth. The company’s strategic priorities, sustainability initiatives, and strong operational execution further support a positive outlook.
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If you are currently holding the stock:
The company’s fundamentals have strengthened significantly post-U.S. deconsolidation, with strong profit growth and improving margins. Continuing to hold appears justified, with potential upside as DMPL builds on its momentum and addresses its capital structure.
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If you are not currently holding the stock:
The current results present an improved investment case, especially for investors seeking exposure to high-growth consumer staples in Asia. However, consider the need for continued capital structure improvements and keep an eye on execution risks related to cost management and new product launches.
Disclaimer: This analysis is based solely on information disclosed in the company’s published results. It is not investment advice. Investors should consider their own financial circumstances and risk tolerance, and may wish to consult a licensed financial advisor.
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