Fresh produce company Chiquita Brands International has reported rises in sales and income for the second quarter ended 30 June, helped by higher banana prices and favourable exchange rates in Europe.
Second quarter net income was $64m, compared with $30m in the same period a year ago.
“Our strong financial momentum continues as we achieved the highest net income in a second quarter in at least the last 10 years. In fact, our profits more than doubled those of the same quarter a year ago,” said Fernando Aguirre, chairman and chief executive officer. “We capitalized on the very strong banana pricing trends in Europe and benefited from continuing volume growth in North America and Asia.”
“At the end of the second quarter, we successfully completed the acquisition of Fresh Express, which is a key component of our sustainable growth strategy,” he said. “We are thrilled by the opportunities ahead as we begin to leverage the complementary strengths of our two organizations and expand Chiquita’s reach in value-added produce.”
The acquisition of Fresh Express, the market leader in packaged salads in the United States, will increase Chiquita’s annual revenues by about $1bn, the company said.
Net sales in the quarter were $1.0bn, up from $848m in the second quarter of 2004. The increase resulted from higher banana pricing and favourable currency exchange rates in Europe, higher volume in both Europe and North America and increased sales of non-banana produce at Atlanta AG, the company’s German fresh produce distributor.
In the company’s Banana segment, net sales rose to $571 million, up $113 million, and operating income was $73 million, compared to $37 million.
In the company’s Fresh Select segment, includes the sourcing, marketing and distribution of whole fresh fruits and vegetables other than bananas, net sales were $408m, up 11 percent versus the second quarter 2004. Operating income in the 2005 second quarter was $4m compared to $2m in 2004. The improvement resulted primarily from a restructured melon program in North America and continued operational improvement at Atlanta AG, partly offset by lower results in Chile, primarily due to the impact of poor weather.
In the company’s Fresh Cut segment which includes packaged salads and fresh-cut fruit, net sales were $21m, up $18m from 2004. Second quarter 2005 results include the company’s Fresh Express unit from the June 28 acquisition date to the end of the second quarter. Substantially all of the 2005 revenue was due to the acquisition of Fresh Express. Operating results were a loss of $3m in the 2005 second quarter compared to an operating loss of $4m in 2004.