Fresh Del Monte said efficiencies and diversification strategy showing results

Fresh Del Monte said efficiencies and diversification strategy showing results

Fresh Del Monte Produce today (1 November) booked increased third quarter sales for 2016 over the year-ago period although sales for the nine months of the year to September were down.

Third-quarter net sales were US$950.2m compared to $936.1m in Q3 2015. Net sales for the nine months up to 30 September of this year were $3.06bn versus $3.08bn in the corresponding period last year.

Chairman and CEO  Mohammad Abu-Ghazaleh welcomed the US-based company's Q3 performance, which he said showed "the strength of our diversification strategy and the results of the efficiency improvements and cost-control initiatives we put in place over the past couple of years to increase profitability and position ourselves for sustainable growth".

"Increased sales in our avocado, fresh-cut and pineapple product lines collectively drove our financial performance during the quarter, along with improved global banana selling prices, and lower commodity costs," Abu-Ghazaleh said. "Given the strength of our business model and our focus on continuous performance improvements, we believe we are well positioned to deliver value to Fresh Del Monte's shareholders over the long-term."

Operating income for the third quarter of 2016 was $44.1m, compared with $34.4m from the same period last year. Comparable third-quarter operating income for this year was $69.8m compared to $35.5m in the corresponding period in 2015, the company said. "The increase was primarily due to higher gross profit, partially offset by higher asset impairments and other charges, net."

Third-quarter net income was $35.2m versus $28.5m in Q3 2015. Comparable net income was $60.9m in the third quarter of this year compared with comparable net income of $29.6m in the year-ago period.

Net sales of bananas for the third quarter of 2016 were in line with the prior year period, the company said. Volume was 2% lower than the prior year. Worldwide pricing increased $0.29, or 2%, to $14.93 per unit, compared with $14.64 per unit in the third quarter of 2015.

Q3 net sales of other fresh produce increased $13.3m to $433.6m compared to $420.3m in Q3 2015. The company said the increase was primarily due to higher net sales in its avocado, fresh-cut and pineapple product lines. Net sales of avocados increased 47% to $67.1m compared with the prior year. Volume increased by 5%, pricing by 41% and the company said unit cost was up 46%.