IRELAND: Fyffes warns prices hikes "necessary" next year
Fyffes said banana supply "constraints" had helped its results
Produce giant Fyffes has warned it will have to increase prices in 2013 to offset higher costs.
The company, which expects its 2012 EBITA to leap by 29-42%, said the sector will again see pressure on costs.
"The industry will once again experience cost inflation in 2013 and, as a result, higher selling prices will be necessary in all markets," Fyffes said.
Fyffes forecasts EBITA for 2012 to reach EUR30-33m (US$38.3-42.7m), compared to EUR23.2m a year earlier. It said it had seen "favourable market conditions" including "supply constraints in the banana category" in the last few months of the year. For 2013, it forecasts EBITA of EUR27-33m.
Analysts at Irish stockbrokers Davy said the trading update from Fyffes was "positive".
"Along with organic growth potential, Fyffes can also pursue non-organic developments due to significant financial flexibility. The shares remain undervalued and continue to distribute a handsome dividend [of a] mid-single-digit yield. We reiterate our 'outperform' rating," Davy analyst Cathal Kenny said.
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