Narrowing fourth-quarter losses were not enough to stem a drop in Chiquita Brands International’s full-year profits.
While the company said yesterday (2 March) that its net losses in the fourth quarter of 2010 narrowed to US$20m from a $27m loss in the same quarter of the previous year, full-year net profit fell to $57m – down from $90m in 2009.
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Company chairman and CEO Fernando Aguirre said: “This was a challenging year and one of the most difficult operating environments in Europe in decades. During the fourth quarter, the magnitude of sudden banana industry supply shortages and related cost increases caused by adverse weather conditions was much greater than anticipated.”
The group recorded a drop in both full-year and fourth-quarter sales, down 7% for the full-year to $3.2bn, and down 13.7% in the fourth quarter to $773m.
The company attributed the drop in full-year sales to lower salad volumes, decreased average European exchange rates and lower banana pricing and volumes. On a comparable basis, income fell to $36m from $103m, due to “lower banana pricing and volumes in Europe”.
For 2011, Chiquita is forecasting a 3% increase in sales, excluding “2010 sales of discontinued, low-margin, non-banana produce lines and its European smoothies joint venture with Danone”. It sees sales as flat on a reported basis.
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By GlobalDataChiquita said that, in contrast to much of 2010, industry banana supplies have “significantly tightened” in Latin America and the subsidised EU and ACP sources due to adverse weather conditions. It said supplies are “expected to remain tight during the first half of 2011 before returning to more normal production levels during the second half of the year”.
The company added that it is focusing on strengthening its long-term competitive position in salads by “building loyalty and preference” for its branded products “through innovations such as the FreshRinse food safety and quality technology”.
