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May 4, 2012updated 06 Apr 2021 5:30pm

US: Produce group Dole mulls spin offs

US produce giant Dole Food Co. is looking at potentially spinning off one or more of its businesses.

US produce giant Dole Food Co. is looking at potentially spinning off one or more of its businesses. 

The company yesterday (3 May) launched a “strategic review” of the business in a bid to “enhance shareholder value”.

David DeLorenzo, president and CEO of Dole, said: “As part of this review, the alternatives we may consider include a full or partial separation of one or more of our businesses through a spin-off or other capital markets transaction, as well as other alternatives that will enhance shareholder value. We are committed to enhancing shareholder value and this review is a company priority.

Dole listed 41% of the company on the New York stock exchange in 2009. Chairman David Murdock still owns 58.1% of the company.

The announcement of the review came as Dole reported mixed first-quarter results.

Net income for the quarter ended 24 March reached $17.2m, compared to $2m the year before. However, operating income slumped 41.5% to $46.4m.

“Our first-quarter results were impacted by extraordinarily low prices in all of our major commodity vegetables,” said David DeLorenzo, Dole’s president and CEO.

Revenues declined 4% to $1.6bn. Excluding revenues of Dole Spain, which was sold during the fourth quarter of 2011, sales decreased 1%. Fresh fruit revenues dropped 5.7% to $1.12bn, primarily as a result of lower sales in the European ripening and distribution business and lower pricing for bananas sold in North America.

Fresh vegetables revenues increased 2% to $235.9m, primarily due to higher sales of fresh berries and packaged salads partially offset by lower pricing for fresh-packed vegetables.

Packaged foods revenues rose 1% to $266.9m, primarily due to higher sales of frozen fruit and healthy snacks in North America and improved pricing worldwide, partially offset by lower worldwide volumes of packaged fruit.

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