Chiquita Brands sustains loss as challenges add up

by FoodBusinessNews.net Staff
Share This:

CINCINNATI — For the fiscal year and fourth quarter of 2006, Chiquita Brands International, Inc. suffered losses as the European banana market remained a challenging environment and American consumers remained concerned about the safety of packaged spinach and salads.

For the full-year ended Dec. 31, 2006, the company sustained a loss of $95,900,000, compared with a net gain of $131,400,000 in 2005.

Net sales for the year totaled $4,499,100,000, up 16% from $3,904,400,000 last year.

Net sales for the company’s Banana segment were flat at $1.9 billion for the year. The operating loss for the segment was $21 million, compared with income of $182 million in 2005.

Full-year net sales for the company’s Fresh Select segment were flat at $1.4 billion. The full-year 2006 operating loss was $27 million, compared with operating income of $10 million in 2005.

In 2006, net sales for the company’s Fresh Cut segment were $1.1 billion, up from $539 million in 2005, mostly due to the Fresh Express acquisition in mid-2005. The segment had operating income of $25 million, compared with an operating loss of $3 million in 2005.

For the fourth quarter ended Dec. 31, the company reported a net loss of $41,900,000, compared with a loss of $19,000,000 in the fourth quarter of 2005.

Net sales for the quarter totaled $1,084,800,000, up 6% from $999,100,000 in the same period last year.

In the Banana segment, net sales increased by 11% to $495 million from $448 million. The operating loss for the segment was $26 million, compared with operating income of $5 million in the same period last year.

The company’s Fresh Select segment saw net sales increase 13% to $316 million from $281 million. The segment had an operating loss of $6 million for the period, compared with a loss of $1 million in fourth quarter of 2005.

In the Fresh Cut Segment, net sales were flat at $256 million. The segment operating loss was $1 million, compared with an operating loss of $5 million in the same period last year. The company said it believes fourth-quarter operating results were approximately $9 million lower as a result of reduced sales and decreased margins resulting from consumer concerns about the safety of packaged salad products.

"We continued to drive top-line growth in the fourth quarter and, as expected, we began to overcome several significant headwinds that had impacted our results in the third quarter," said Fernando Aguirre, chairman and chief executive officer.

Mr. Aguirre said that although the company continues to struggle with challenges in the European banana market and lingering consumer concerns about the safety of fresh spinach and packaged salads, he believes the initiatives the company has in place will help it gain momentum in 2007.

Comment on this Article
We welcome your thoughtful comments. Please comply with our Community rules.








The views expressed in the comments section of Food Business News do not reflect those of Food Business News or its parent company, Sosland Publishing Co., Kansas City, Mo. Concern regarding a specific comment may be registered with the Editor by clicking the Report Abuse link.