Good evening to you all. Thank you for joining Del Monte Pacific's results briefing for the third quarter and nine months ending January for fiscal year 2026. Representing Del Monte in this call are Luis Alejandro, COO of Del Monte Pacific and President and COO of Del Monte Philippines; Parag Sachdeva, CFO; and I am Ige Sison, Chief Corporate Officer of DMPL. Parag will go through three slides on the three months and nine months results, and then Sito Alejandro will wrap up with the strategic priorities and outlook, and then we'll proceed to Q&A, which will be moderated by our colleague Jennifer Luy. Okay, we'll go through the highlights now with Parag Sachdeva. Thank you.
Thanks a lot, Ige, and good evening to all who are on the call. Pleased to share with you the third quarter and nine months year-to-date results for Del Monte Pacific. We did sustain a very strong growth trajectory in the third quarter. Our sales at $243.8 million were up 20% on higher sales in the international markets, and also Philippines did grow by 5% in U.S. dollar terms. Our net profit at $10 million continued to be in the same trajectory as we had seen in the first half, and it improved from $2.5 million, driven by improved sales and margins.
If you consider and recognize write-down of investments and other assets under discontinued operations, that resulted in negative equity at the end of fiscal 2025, the company's net debt-to-equity ratio is a negative 1.7 times. We do continue making significant progress on capital raising initiatives amidst the volatile market environment to reduce our capital deficit of $590 as of 31st January 2026. Would like to also note that our debt to EBITDA has improved, and I'll elaborate on that in the coming slides. Thank you, Ige.
In terms of third quarter results, at 20% growth, with our international business growing at 34%, would like to highlight that of the 34% growth that we saw in international business, volume contributed around 27.5, and we got good robust momentum on pricing as well, with pricing contributing around another 6.4%. When it comes to Philippines, volume grew at 3.3% and pricing contributed another 2.8% in line with 2.6% inflation. Our gross margin performance, as you can see at 32.7%, is a reflection of a very strong momentum on our overall international business.
Both fresh and processed had good margins. Our costs have also improved, particularly in the light of productivity improvement that we had planned for, particularly for our processed pineapple variety, which had significantly gone down in Fiscal Year 2024. That's on track or, in fact, ahead of track. Our productivity is planned to improve by more than 15% versus last year, so that's also helping our costs. Overall, from a commodity perspective, so far in the first nine months, we saw favorable momentum, particularly with tomato paste, sugar, while in the fourth quarter, we are starting to see now more volatility, both in urea and obviously fuel, which must be top of mind for everybody.
EBITDA, driven by our gross profit improvement, also was higher. Net profit at $10 million was much higher than the third quarter, and our debt also marginally reduced from $1.03 billion to $990 million. Our net debt to EBITDA, as I mentioned, due to improvement in profitability and also some pay down, has gone down from 7.5 times- 5.9 times. Our cash flow from operations at $53.5 million was slightly lower than last year, but that's because of slightly higher inventory because our pineapple volume is up, plus also because our receivables for international business from the significant growth were on the higher side as compared to the third quarter last year. Next slide, please.
Overall, our revenue, as you can see, at $682.4 million was up 14.2%. If we have to look at the growth from international business, it was double-digit at 15.2%. Our Philippines business grew at 8.4%. Both our pillars have been having a very strong momentum on a year-to-date month nine basis. Gross margin at 33.2%, driven by sustainable pricing, improved sales mix, particularly on our international business with higher sales of Deluxe, and also favorable commodity trends and improvement in our pineapple costs, particularly for C-74, our processed variety, led to this gross margin improvement.
Our EBITDA, driven by higher sales and gross margin improvement, was at $133.5 million, which is a 22.8% increase. Net profit driven by gross profit EBITDA at $32.3 million is a significant improvement over last year. Net debt, as we talked, is down. Net debt to EBITDA is pretty much covered in the previous slide, and cash flow from operations is quite strong at $221 million, though lower than last year, and as I mentioned, mainly because of some inventory increase as compared to last year. Prior year was benefiting from a very low inventory base, which was also to some extent starting to impact our sales.
With increased pineapple supply, we are now able to get to the right levels. Also our receivables, as I explained, was higher as compared to last year at the end of January because the mix between international and local receivables was quite different, with higher sales coming from international business in Fiscal Year 2026. With that, let me hand it over to Sito, or should I just continue with it, Sito?
Okay. Thank you, Parag. Good evening, everybody. Let me take you through a summary of our strategic priorities and the outlook for the year now. Overall, we remain focused in growing our Asian operations to drive long-term growth and profitability. Of course, this is led by our subsidiary, Del Monte Philippines, which continues to perform well with resilient consumer demand and very, very strong and stable supply chain. Our key priorities include first in the Philippines to further drive market leadership in our core beverage, culinary, and packaged food. We will also be launching in new segments and in adjacencies to broaden our consumer base. Equally important to us is diversifying growth across the retail channel to cover convenience stores away from home, which used to be called our food service business, drugstores, and schools.
In international, the priority is to further expand leadership of fresh MD2 pineapples across North Asia, specifically strengthening our leadership share in China, and of course, equally important to us is to regain our leadership in Korea now, which we lost for a bit last year, and we believe that we will be back on track by the middle of the year with a better supply situation now. Operations is all about the productivity of our C-74 pineapple in cost management, cost control proactively, reducing waste and reducing inventory write-offs, and also stabilizing our inventory levels to make sure that we optimize our working capital. Prioritizing our raising of equity to reduce leverage and capital deficit resulting from impairment of our investment in the U.S. operations.
The first nine months of the year results, we've demonstrated strong growth momentum in the Philippines as well as on international business, driven by both the packaged goods as well as fresh. Barring unforeseen circumstances, we expect the company to sustain its profitability in 2026. However, the path to overall corporate financial health needs to be supported by successful execution of our equity raise program. That's it, Ige, and we will welcome everybody to our Q&A.
Thank you, Sito. Thank you, Parag. Yeah, Jenny will moderate the Q&A, and there's some questions already in the Q&A box.
Okay, first question is, can you elaborate on equity raising options being taken?
We are in the process of talking to a few investors and it's a consortium that we are in discussions with, and they have expressed interest and also submitted to us a non-binding term sheet. That has been the progress on it. We are looking at raising anywhere up to $400 million from this particular initiative.
Okay. Thank you, Parag. How much proceeds were raised from the sale of the Indian investments, and how were the proceeds used?
Thank you, Jen. So far we have divested 6.4% of the 14.4% stake that we hold in the Indian business called Sundrop brand. That 6.4% got us around net $18 million as proceeds, and these proceeds were ultimately used for the operating needs of Del Monte Philippines, Inc., which is our main operating and core business in Philippines.
Thank you, Parag. How much debt reduction is expected by the end of FY26?
Without equity raise, we are not expecting any major debt reduction by the end of fiscal 2026. The debt reduction that we have achieved in the first nine months has already been outlined. We will get an opportunity to further look at debt reduction by May or June, once we sell another 5% of our stake in the India business, for which we do have a binding offer.
Thanks, Parag. Now we don't have any more questions. In case anyone else has questions, you may raise your hand, and you can ask your questions verbally or you can also type in the Q&A box. Okay, we have two new questions. How are you managing short-term obligations? Are you mostly refinancing?
No, the banks continue to cooperate. We had already extended the maturities in August and September last year. Plus, as we look at equity raise, we continue to collaborate with the banks and look at various options to refinance and extend the loans so that we can match it with our cash flow and also with the use of proceeds that we would have from the equity raise initiative as well. Both are in play, and we continue to get good support from the banks in addressing the issue around maturities and extensions.
Thank you, Parag. Given the current share price, will it be very dilutive to do an equity raise? I think he's thinking it's from DMPI.
We are looking at equity raise more at DMPI level. We think that's the most important asset, and it will actually unlock the valuation of the business.
Thank you. Next is, how close are you to concluding your talks with the consortium for equity raising?
I think considering several regulatory considerations in play, I would hesitate to give you a timeframe whether we can complete this in the next couple of months, but we absolutely are prioritizing the same and can assure you that we will have a more definitive update if we progress by the next investor call.
Okay, thanks, Parag. Are there any other non-core businesses you are considering to sell after Sundrop brand ?
We are looking at a few assets, but nothing very material that we expect to sell in the near future.
Thank you. What is the current interest rate on your $1 billion loan?
Our interest rate on average is slightly less than 7%.
Okay, thanks, Parag.
On a weighted average basis.
We don't have any open questions. Okay, now we have one more. The profitability for the past three quarters has been encouraging. Is there a seasonality factor to the performance? What about fourth quarter?
I would just say it's sustainable if you are trying to understand if we have some one-offs in that, not really. We do have good momentum on the processed business, which as you know, can be cyclical. The processed export business can be somewhat cyclical, and every three, four years, depending on how competitive markets have our position from a supply perspective, that can play a role in the overall margins of the business. To that extent, we are having tailwinds in this year, which we do expect to continue in the fourth quarter. The only caveat on the fourth quarter is the significant headwinds that we could face with the volatility created by the war situation.
Thank you, Parag. Does anyone have more questions?
Does anyone have more questions? Yeah, if there are no more questions, we'll conclude our results briefing. Thank you for joining this call.
Thank you.
Thank you so much.
Just re-
Thank you very much.
Just reach out to us directly, yeah. Thank you.
Thank you very much, everybody. Good night.
Thank you. Bye.