Cincinnati-based fruits and vegetables producer and distributer Chiquita Brands International today [Tuesday] reported that its EBITDA for 2001 reached US$155m, up from US$145m in 2000.
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The improvement in results occurred in the company’s Fresh Produce business primarily as a result of higher European banana pricing and volume. The benefit of the higher pricing and volume more than offset the substantial negative effect on earnings resulting from weak European currencies in relation to the US dollar. The company’s Processed Foods operating results declined primarily due to lower pricing on canned vegetables throughout the year, as the industry was reducing inventory levels.
Fourth quarter EBITDA improved to US$20m in 2001 from a loss of US$16m in 2000, primarily as a result of higher banana pricing in both Europe and the US, higher banana volume in Europe, and lower Fresh Produce delivered costs.
Net sales for the year of US$2.2bn were comparable to the prior year and, for the Q4, increased US$32m to US$561m. For the FY, sales increases due to higher banana pricing and volume were offset by the effect of weak European currencies and prior year divestitures. The Q4 increase occurred primarily as a result of higher pricing and volume in Fresh Produce.
Interest expense in 2001 of US$122m included US$78m of interest on parent company debt that was accrued but not paid due to the company’s debt restructuring.
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By GlobalDataFor 2001, Chiquita reported a loss of US$57m (US$.94 per share) before US$62m of reorganization costs and other unusual items. For the Q4, Chiquita reported a loss of US$27m (US$.38 per share) before US$47m of reorganization costs and other unusual items. Net loss for the FY 2001 was US$119m (US$1.78 per share), and the net loss for the Q4 of 2001 was US$74m (US$.98 per share).
Reorganization costs were US$34m during 2001 (US$27m during the Q4) and included professional fees and the write-off of parent company debt issue costs. The other unusual charges of US$28m (US$20m in the Q4) were primarily associated with the closure of farms, a third quarter labor strike and related labor issues at the Company’s Armuelles, Panama banana production division. As previously reported, the Company closed non-competitive farms that represented about 20% of this division and has reached agreement with the local labor union regarding work practices that should lead to gradual improvements in productivity, cost and quality in the remaining farms.
In 2000, Chiquita reported a loss of US$75m (US$1.38 per share) before US$20m of charges and write-downs of production and sourcing assets in the Company’s Fresh Produce operations. For the 2000 Q4, Chiquita reported a loss of US$69m (US$1.10 per share) before the charges and write-downs. The company’s net loss for the FY 2000 was US$95m (US$1.68 per share), and the net loss for the Q4 of 2000 was US$89m (US$1.40 per share).
As previously reported, Chiquita filed a Pre-Arranged Plan of Reorganization in late November under Chapter 11 of the US Bankruptcy Code in Federal Court in Cincinnati. The company’s Plan is scheduled for a confirmation hearing in Federal Court in Cincinnati on 8 March 2002. The Plan will reduce Chiquita’s debt and accrued interest by more than US$700m and its future annual interest expense by about US$60m. The Chapter 11 Plan involves a reorganization of only the publicly-held debt and equity securities of Chiquita Brands International, Inc., which is a parent holding company without any business operations of its own. The Plan does not affect the Company’s business operations, which are conducted by independent subsidiaries that generate positive cash flow and have access to their own credit facilities. These subsidiaries continue to operate normally.
