Fresh Del Monte Produce Q3 net profit slides

Fresh Del Monte Produce, a US-based fruit and vegetable producer, has reported a 73% drop in net earnings for the third quarter of 2013 to $6.4m, compared with $23.5m for the same period in 2012.

The net earnings were hit by higher costs and unfavourable foreign exchange rates, the company said.

For the period ended 27 September 2013, net revenues were up 9.2% to $861.1m, from $788.8m a year ago, driven by increased selling prices in the company’s banana and other fresh produce business segments, as well as higher sales volume in all of its business units.

The company faced a challenging environment in Europe due to weaker demand for fresh produce in the continent.

Gross profit for the third quarter of 2013 was $53m, compared with $74.4m in the third quarter of 2012.

Fresh Del Monte Produce chairman and CEO Mohammad Abu-Ghazaleh said that during the quarter, the company made impressive strides in increasing its global customer relationships.

"We experienced growth in all major markets as we strove to capitalise on our position as a leader in the global produce industry," Abu-Ghazaleh added.

"However, our progress was limited by an industry-wide oversupply of bananas, increases in logistic and fruit costs, as well as unfavourable year-over-year exchange rates."

Segment-wise, the Bananas division reported a 12% increase in net sales to $402.3m, compared with $359.8m in the third quarter of 2012, while gross profit decreased 89.1% to $1.3m.

Other Fresh Produce sales increased 9% to $366.1m primarily due to higher sales in the company’s tomato, melon, non-tropical and fresh-cut product lines.

Net sales in the Prepared Food segment decreased 1% to $92.7m primarily due to lower sales volume in the company’s poultry product line.

At the end of the third quarter of 2013, total debt decreased to $99.7m from $126.2m at 2012-end.

For the nine-month period, Fresh Del Monte Produce reported a 6% increase in net sales to $2.8bn, compared with $2.64bn a year ago, while net income decreased 23.5% to $109.5m, compared with $143.2m for the same period a year ago.