Del Monte Pacific - Phillip Securities 2022-12-12: Record Margins From Price Increases

Del Monte Pacific - Record Margins From Price Increases

  • Del Monte Pacific (SGX:D03)'s results were better than expected. 1H23 revenue and PATMI (excluding one-offs) were 49%/67% of our FY23e forecast. The continued push towards branded products drove gross margins to 29%, and is ahead of our modelled 26% from increases in selling price.
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  • We raise our F23e earnings forecast for Del Monte Pacific by 19% to adjusted US$123mil. We maintain our BUY recommendation on Del Monte Pacific and nudge our target price lower to S$0.67 (previously S$0.69), pegged to 8x FY23e P/E, a huge 50% discount to the industry valuation due to its smaller market cap and higher gearing.
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Del Monte Pacific FY22 – The Positives

Record gross margins.

  • Gross margin climbed to record high 29.4%, a 2% point rise y-o-y. Margin gains were from US operations from multiple price increases over the past 18 months. These have supported margins despite raw material and logistics cost pressure.
  • There was also operating leverage from a slower 6% rise in general and administration expenses.

Sharp rebound in Philippines.

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Above is the excerpt from report by Phillip Securities Research.
Clients of Phillip Capital may be the first to access the full report in PDF @

Paul Chew Phillip Securities Research | 2022-12-12

Read also Phillip's most recent report:
2023-03-15 Del Monte Pacific - FX & Weak Festive Spend A Drag.

Price targets by other brokers at Del Monte Pacific Target Prices.

Listing of research reports at Del Monte Pacific Analyst Reports.

Relevant links:
Del Monte Pacific Share Price History,
Del Monte Pacific Announcements,
Del Monte Pacific Dividends & Corporate Actions,
Del Monte Pacific News Articles


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