Irish fresh produce group Fyffes has said it expects 2007 results to be ahead of current expectations.
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In a trading statement, the company said it was increasing its target adjusted EBIT for the year ended 30 December 2007 to €17m from €15m previously, excluding its 40% share of the results of Blackrock International Land.
Adjusted EPS, excluding the group’s share of Blackrock’s results, is targeted to be €4.1 cent.
“During the second half of the year, the impact of the further increase in bunker fuel costs has been offset by favourable exchange rates and higher average selling prices,” the company said.
The statement continued: “Looking ahead to 2008, the tropical produce industry is facing further significant inflation in all its key input costs, including fruit, shipping and fuel. Notwithstanding these factors, Fyffes is targeting a mid-single digit percentage increase in its adjusted EBIT for 2008 on a like-for-like basis, excluding the anticipated positive impact of its recent entry into the US winter melon market.”
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By GlobalDataThis target reflects anticipated improvements in the group’s existing melon and pineapple operations, the benefit of more favourable average exchange rates and achieving the required increases in average selling prices, the company said.
Fyffes’ medium term strategy is to double the size of its business in the five years ending 2011, with 75% of this growth from acquisitions and 25% organically.
Fyffes recently announced its entry into the US winter melon market with the acquisition of a 60% stake in Florida-based Sol Group Marketing Co. Fyffes also secured the right to ship the fruit imported by Sol Group Marketing from Honduras and Guatemala.
In December 2007, it acquired the remaining 50% of its pineapple production business in Costa Rica, while at the same time selling its 50% stake in a pineapple farm in Guatemala.
The total investment by Fyffes in these melon and pineapple businesses amounted to €27m, including working capital advances of €7m.
