An increase in net profits failed to stem a drop in sales for Fresh Del Monte Produce in the first quarter of the year.
The fresh produce giant today (1 May) recorded a 13.2% increase in first-quarter profits to US$62.5m for the three months to the end of March. Excluding asset impairment and other charges, net income climbed 9.6% to $62.6m.
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Operating profits in the quarter, however, amounted to $65.5m, a 12.5% drop on the prior-year period. The company blamed lower gross profit on the decline.
Net sales also dropped in the three-month period, by 7.8% to $897.9m. The drop was due to lower net sales across all Fresh Del Monte’s business segments, primarily lower sales volume in its other fresh produce business and lower volumes of bananas in its Middle East and Asia regions.
Despite the declines, the company said it made “good strategic progress” during the quarter.
“Our business was favourably impacted by our long-term initiative of assuming control of the sales and marketing function for Southern Europe, and by improvements in our logistics structure,” said chairman and CEO Mohammad Abu-Ghazaleh. “Additionally, we saw continued growth in our fresh-cut produce business, and continued expansion of our operations internationally to bring our products closer to end customers.
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By GlobalData“Despite these advances, our decisions to protect our margins resulted in lower net sales in our tomato and melon product lines and in our banana business in Northern Europe. However, with our emphasis on focused process and efficiency improvement and a strong balance sheet, we are confident we are on the right track to build long-term value,” he added.
Click here to view the full earnings release.
