Del Monte Pacific Limited Is Trading Close To Its 52-Week Low. How Does It Make Its Money?
Del Monte Pacific Limited (SGX: D03) is a food and beverage company with a dual-listing in Singapore and the Philippines. It operates mainly under 4 brands, namely Del Monte, S&W, Contadina and College Inn.
The Group sells packaged fruits, vegetable and tomato, sauces, condiments, pasta, broth and juices, under various brands and also sells fresh pineapples under the S&Wbrand.
The company has recently caught my attention because its shares are trading close to their 52-week low.
To better understand Del Monte, it could be useful to find out how it makes its money.
First, let’s look at an overview of the revenue from the different segments.
Source: Del Monte 2016 Annual Report
We can see that the company generates income from 4 segments within 4 regions.
Packaged Fruit and Vegetable – This is the biggest segment within the group, accounting for 70% of 2016’s revenue.
In this segment, Del Monte sells processed fruit and vegetable products under the Del Monte and S&W brands, as well as buyer’s labels. The main products under this segment are canned beans, peaches, and corn which are sold in the United States whereas canned pineapple and tropical mixed fruit are sold in Asia Pacific.
Culinary – This segment is the second-largest in term of revenue for Del Monte.
Here, the company sells packaged tomato-based products such as ketchup, tomato sauce, pasta sauce, recipe sauce, pizza sauces, pasta, broth and condiments under four brands namely Del Monte, S&W, College Inn and Contadina.
Beverage – This segment offers various ready-to-drink juices to various markets, with a significant market share in the Philippines.
Here, Del Monte sells products such as 100% pineapple juice in can, juice drinks in various flavours in can, tetra and PET packaging, and pineapple juice concentrate.
Fresh fruits and others – This segment sells S&W branded fresh pineapples in Asia Pacific and buyer’s label or non-branded fresh pineapples in Asia, and sales and profit of cattle in the Philippines.
In summary, Del Monte makes money in four different segments.
As the segments operate in different markets (with different economics), understanding various parts allows investors to better appreciate the group’s overall prospects in the future.