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May 3, 2006

US: Q1 sales and profit down at Fresh Del Monte

Fresh Del Monte Produce, the US-based producer, marketer and distributor of fresh, fresh-cut and prepared fruit and vegetables, has recorded gross profit for the first quarter of 2006 of US$67.7m, down from $117.0m in the first quarter of 2005, with net earnings down from $57.9 m to $16.2m.

Fresh Del Monte Produce, the US-based producer, marketer and distributor of fresh, fresh-cut and prepared fruit and vegetables, has recorded gross profit for the first quarter of 2006 of US$67.7m, down from $117.0m in the first quarter of 2005, with net earnings down from $57.9 m to $16.2m.

The company said earnings were negatively impacted by higher production and fuel costs, along with higher costs related to the procurement of bananas from Ecuador and elsewhere to offset banana shortages in its Central America growing areas.

Earnings per diluted share fell to $0.28 for the first quarter of 2006, from $1.04 per diluted share in first quarter of 2005.

Net sales were up slightly at $840.0m, from $838.5m in the corresponding period last year, on the back of increased banana volumes in Asia and higher sales of non-tropical fruit in North America.

“The factors that impacted our financial results for the first quarter of 2006 were similar to what we experienced in the fourth quarter of 2005,” said chairman and CEO Mohammad Abu-Ghazaleh. “A combination of higher fruit and fuel-related costs took their toll on our results, as did lower banana sales in our North America market.”
 
While Abu-Ghazaleh said he expected these factors to prevail during the short term, Fresh Del Monte would “continue to focus on making strides in our business”. In particular, the company plans to expand its prepared food business and implement innovative programmes and products in its fresh-cut division, both areas that it regards as engines of growth.
 
“As we continue to pursue this growth, we will maintain a steady focus on controlling costs, increasing operating efficiencies, and strengthening our business for the long term,” Abu-Ghazaleh said.

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