Fresh Del Monte Produce reports 8.4% rise in Q2 net profit

Fresh Del Monte Produce, a US-based fruit and vegetable producer, has reported that its net earnings for the second quarter of 2013 increased 8.4% to $62m, compared with $57.2m for the same period in 2012.

The net earnings were driven by improved sales in all of the company’s produce segments, although the margins were affected by higher costs.

For the period ended 28 June 2013, net sales increased 6.9% to $1.02bn, compared with $957.6m for the same period a year ago.

Fresh Del Monte Produce stated that the increase in net sales was the result of increased selling prices in all of the company’s business segments and higher sales volume in its banana and other fresh produce business segments.

Gross profit decreased 9.02% to $105.9m, compared with $116.4m in the same period in 2012, due to higher costs related to the production and procurement of fruit and ocean freight.

Fresh Del Monte Produce chairman and CEO Mohammad Abu-Ghazaleh said, "Our growth in the second quarter was fundamentally driven by our ability to increase sales through core product line growth, extending our reach in non-conventional delivery channels, expanding our global brand presence, product innovation, and continued consumer demand for healthy, fresh produce."

"We believe Fresh Del Monte’s financial depth and flexibility allows us to continue to leverage these capabilities and strengthen our leadership position in the global fresh produce industry," Abu-Ghazaleh added.

Segment-wise, the Bananas division reported an 8% increase in net sales to $457m, compared with $424.9m in the second quarter of 2012, while gross profit decreased 7.4% to $34.7m.

Other Fresh Produce sales increased 5% to $478.3m primarily due to higher sales in the company’s non-tropical and fresh-cut product lines.

Net sales in the Prepared Food segment increased 12% to $88.6m primarily due to higher sales volume in the company’s canned and processed pineapple product lines.

At the end of the second quarter of 2013, total debt decreased to $122.8m from $126.2m the previous year.

For the six months ended 28 June, Fresh Del Monte Produce reported a 4.86% increase in net sales to $1.94bn, compared with $1.85bn a year ago, while net income decreased 13.8% to $103.1m, compared with $119.7m for the same period a year ago.

Fresh Del Monte Produce is a vertically integrated producer, marketer and distributor of fresh and fresh-cut fruit and vegetables and prepared food in Europe, Africa, the Middle East and the countries formerly part of the Soviet Union under the Del Monte brand.