Del Monte Pacific Ltd. (DMPL) has begun restructuring discussions with its principal creditors and other stakeholders as it works to address near-term liquidity needs and upcoming debt maturities.

In a regulatory filing on Thursday, the food company said it is working with external financial advisers on a broader restructuring framework. Potential measures include debt restructuring, operational initiatives, asset sales, shareholder support, and other capital actions.

DMPL said the performance of its core Philippine business, Del Monte Philippines, Inc. (DMPI), would not be enough on its own to resolve the group’s liabilities and negative equity. The company also said that an equity raising by itself is not expected to return DMPL to positive equity.

As of July 31, the group had negative equity of $578.5 million, an improvement from the $589.9-million deficit recorded at the end of April. Current liabilities exceeded current assets by $609.7 million, mainly because of revolving loans historically extended by local partner banks.

The company is also considering the divestment of certain assets to simplify its business structure and generate liquidity. Any such transaction would require appropriate approvals, including approval from minority shareholders where required.

“In light of the existing negative equity, DMPL does not expect to declare and pay dividends to its shareholders while the capital deficit remains outstanding,” the company said.

DMPL’s net debt stood at $969.7 million as of July 31, down from $977 million at the end of April, mainly because of debt settlements. Current borrowings totaled $577.6 million.

Cash and cash equivalents fell to $4 million from $8.1 million at the end of April. The company attributed the decline mainly to the timing of payments.

The balance-sheet strain persisted despite stronger earnings. Attributable net profit nearly tripled to $16.1 million in the three months ended July 31, from $5.5 million a year earlier. Revenue increased 9% to $222.1 million, while gross profit rose 13% to $74.7 million.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) grew 25.7% to $49.3 million, and operating profit increased 14.1% to $41 million. Gross margin expanded to 33.7% from 32.5%.

DMPL said the increase in net profit was driven by stronger sales, wider gross margins, improved operating income, and lower financing costs.

International sales rose 21.4% to $118 million, supported by higher volumes of fresh pineapple, packaged products, and not-from-concentrate juice. Fresh pineapple sales increased 20.3%, while packaged pineapple sales climbed 23.3%.

Asia-Pacific sales grew 5.8% to $195.1 million, helped by higher export volumes, particularly to China and South Korea, as well as higher prices for S&W Deluxe Pineapple.

Philippine sales increased 2.2% in peso terms but declined 6.9% in US dollar terms to $82.6 million because of the depreciation of the peso. The company also reported softer volumes in its core segments.

Sales in Europe jumped 71% to $19.5 million on higher packaged pineapple sales, while sales in the Americas fell 6% to $7.5 million.

DMPL said it expects the business to remain profitable in fiscal year 2027, although it continues to face a challenging operating environment. Volatility in fuel, fertilizer, and tinplate costs, along with uncertainty related to El Niño, could affect performance, the company said.

At the local bourse on Thursday, DMPL shares declined 5.41% to P3.50 apiece. — Alexandria Grace C. Magno