In today’s briefing:
- Del Monte Pacific (DELM SP): Deep in Debt, Slipping Margins, Rising Rates – Perfect Storm?
Del Monte Pacific (DELM SP): Deep in Debt, Slipping Margins, Rising Rates – Perfect Storm?
- Del Monte Pacific reported a steep decline in profits led by a fall in gross margins and a steep rise in interest costs for the quarter ending 31st Jan 2023.
- The company’s gearing has risen to 5.8x led by (1) the refinancing of preference shares and expensive debt (2) acquisition of the Kitchen basics brand (3) increased working capital loan.
- Del Monte’s precariously bloated debt levels and tighter operating conditions, given inflation-led cost pressures and moderating demand, in the current high-interest rate environment heightens the company’s financial risk.
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