US: Cost cuts boost Chiquita profits

By: just-food.com | 1 August 2008

Chiquita Brands International, the US-based produce giant, has reported a sharp jump in half-year profits thanks to improved banana pricing and cost cuts.

The company posted operating income of US$129.2m for the first six months of the year. The result compared to $48.8m a year earlier.

Last October, Chiquita announced plans to overhaul the business and reduce costs by $80m a year and the revamp has improved the company's bottom line.

Higher banana prices boosted revenue, which climbed 4.9% to $1.93bn for the first six months of 2008. The higher prices, however, offset lower banana volumes, Chiquita said.

During the second quarter, operating profit more than doubled to $72.4m, while net sales rose 6.5% to $994.6m.

Chairman and CEO Fernando Aguirre said Chiquita's second quarter had been the company best for three years.

"We are particularly satisfied that our pricing discipline and focus on profitability has improved the performance and momentum of our banana segment for the fourth consecutive quarter," Aguirre said.

He noted, however, that the company was "disappointed" with the performance of its salad business, which booked a loss for the second quarter due to higher fuel and commodity costs.

"We are focused on executing plans to improve our salad margins over time," Aguirre said.

Sectors: Fresh produce

Companies: Chiquita