Fruit and vegetable producer and processor Fresh Del Monte Produce has blamed increased costs for a reduction in net income for the second quarter and six months ended 1 July 2005.
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The company’s net income was $46.5m for the second quarter of 2005, compared with net income of $59.4m for the same period last year. Net income for the quarter was lower primarily due to increased production and transportation costs, along with increased selling, promotional and administrative costs associated with the company’s expanding prepared food and fresh-cut businesses, it said.
Net sales increased to $922.8m for the second quarter as compared with $763.6m for the same period last year, including a $90.0m contribution from the company’s prepared food business. The remaining increase in net sales for the quarter was from the company’s continued expansion in its other fresh produce business.
For the first six months of 2005, net income was $104.4m, compared with $106.4m last year.
Year-to-date net sales increased to $1,761.3bn, compared with net sales of $1,477.4bn for the same period in 2004.
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By GlobalData“During the second-quarter, Fresh Del Monte’s focus remained on implementing our growth strategy and advancing our transition from a vertically integrated fresh and fresh-cut produce supplier to a global diversified food company,” said Mohammad Abu-Ghazaleh, chairman and CEO. “Though we faced higher fruit, energy and containerboard costs during the quarter, we also saw substantial sales growth in our fresh-cut business and growth in our prepared food business. To expedite our growth in prepared food and fresh-cut we made significant investments during the quarter, a strategy we expect to continue as we work to build the platform to support our future growth.”
