USA: Chiquita sales, income rise in Q1
US fresh produce company Chiquita Brands International has reported rises in sales and income for the first quarter of 2005.
Sales rose to $931.8m in the quarter ended 31 March, compared with $793.2m in the same period a year earlier. Net income was $86.5m, up from $19.9m a year earlier.
"Chiquita achieved its best quarterly results in more than a decade, as we successfully expanded volume in our core banana business, enjoyed strong pricing in Europe and North America, and benefited from favourable foreign exchange," said Fernando Aguirre, chairman and chief executive officer.
"We managed through severe flooding on our farms and endured higher costs for fuel, paper and ship charters that are likely to continue through the year. However, we partially mitigated those increased expenses through lower purchased fruit costs and productivity improvements in tropical production and logistics."
In January 2005, the Atlantic coast of Costa Rica and Panama experienced torrential rains, which produced significant flooding damage to many farms owned by major banana marketers, including Chiquita, and independent growers in the region. The company expects to incur a loss in supply of more than three million boxes of banana production from its owned farms and independent suppliers in 2005, mostly in the first half of the year.
The company is experiencing increased costs due to higher expenses for alternative banana sourcing, logistics and farm rehabilitation associated with the flooding. These incremental costs, including write-downs of damaged farms and the impact of volume shortfalls, totaled $8m in the 2005 first quarter and are currently expected to total approximately $10-15m for the year.
Higher spot market sales prices in North America, as well as temporary contract price increases that the company applied in February, March and part of April 2005, have mitigated the company's higher costs resulting from the flood.
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