US fresh fruit and vegetable producer Fresh Del Monte has reported a sharp fall in quarterly net income due to higher operating costs.

The Florida-based company reported net income of US$47.0m, or 81 cents per share, for the first quarter to 26 March, compared to $88.1m, or $1.35 per share, in the first quarter of 2003. Net sales rose to $713.8m from $643.8m in the same period last year.

This 11% net sales increase was driven by an expansion of the company’s distribution channels, contributions from product expansion through recent acquisitions and favourable foreign exchange, the company said.

Gross profit for the first quarter of 2004 was $77.2m, compared with $107.0m in the first quarter of 2003. The gross profit decrease was a result of lower banana pricing in North America and Europe, combined with higher sea transportation and operating costs, offset slightly by improved performance in Fresh Del Monte’s grape and fresh cut business. Gross profit declines were also partially offset by foreign exchange gains and by consistent performance of the company’s Del Monte Gold Extra Sweet pineapple business.