Chiquita experiences $3.4 million loss in quarter
May 02, 2007
by FoodBusinessNews.net Staff
CINCINNATI — Chiquita Brands International Inc. sustained a loss of $3.4 million in the first quarter ended March 31, which compared with net income of $19.5 million during the same quarter of the previous year.
The company attributed the loss partly to a $5 million charge to leave unprofitable farm leases in Chile.
Net sales increased 3% to $1,192,400,000, which compared with $1,153,700,000 during the same quarter of the previous year. Net sales increased as a result of increased banana volume in Europe and North America and favorable foreign exchange rates, which were partly offset by lower local banana pricing in Europe.
"During the first quarter, we continued to make good progress in both our banana and salad operations," said Fernando Aguirre, chairman and chief executive officer. "In Europe, we grew volume while maintaining our premium market position and profitability, despite last year’s onerous regulatory changes. In our North American banana business, we also grew volume, recovered cost increases, and are successfully introducing higher-margin, innovative products to differentiate the Chiquita brand.
"At Fresh Express, we have strengthened our No. 1 position in retail value-added salads and reinforced our food safety leadership in the face of soft consumer demand for packaged salads. While these primary segments are improving, we have also taken decisive actions to improve profits in our other produce operations, including exiting certain farm operations in Chile."
The banana segment saw net sales increase 8% to $523 million during the quarter compared with $483 million during the same quarter of the previous year. Net sales in salads and healthy snacks decreased 4% to $292 million, which compared with $304 million during the same quarter of the previous year. The other produce segment saw net sales increase 3% to $378 million compared with $367 million during the same quarter of the previous year.
During the quarter, the U.S. Department of Justice ordered Chiquita to pay a $25 million fine for paying off foreign terrorist organizations in Colombia to protect employees. However, the company set aside this amount during the previous year in anticipation of the settlement.