CORAL GABLES, FLA. — Rising demand for healthy, convenient snacks is benefiting Fresh Del Monte Produce Inc., which reported higher earnings and sales in the recent quarter despite unfavorable exchange rates and problematic weather in certain growing regions that dampened results.
|Mohammad Abu-Ghazaleh, chairman and c.e.o. of Fresh Del Monte Produce.|
“Our results reflect momentum in our global value-added fresh-cut product line, increased penetration within our existing distribution channels, and flexibility to deliver to markets with the strongest demand,” said Mohammad Abu-Ghazaleh, chairman and chief executive officer of Fresh Del Monte Produce. “We continued to capitalize on health and wellness, and growing convenience trends in the marketplace with new product initiatives and further invested in our global footprint to increase value-added production.”
For the second quarter ended June 26, net income attributable to Fresh Del Monte was $64.5 million, equal to $1.22 per share on the common stock, which compared with $64.3 million, or $1.15 per share, for the prior-year period. Net sales advanced to $1,134.1 million, up slightly from $1,131.3 million the year before, driven by higher net sales in the company’s banana and other fresh produce segments, which offset negative year-over-year exchange rates in Europe and Asia. Inconsistent weather patterns in Central and South America resulted in lower banana and pineapple yields and quality issues.
“During the quarter we made tremendous progress with our global initiatives to expand our market presence, product offerings, and expand our operational footprint, positioning Fresh Del Monte for enhanced performance over the long term,” Mr. Abu-Ghazaleh said during a July 28 earnings call with financial analysts.
The company’s banana segment posted net sales of $513.8 million, a 2% increase over the prior year, driven by higher sales in the company’s North America and Asia regions and higher selling prices in the Middle East region. Gross profit for the segment declined 11% to $44.6 million.
For the other fresh produce segment, net sales increased 1% to $523.7 million, led by higher sales volume and selling prices in the company’s fresh-cut product line and higher sales volume in the non-tropical product line. Gross profit fell 1.8% to $54.9 million.
Prepared food segment sales decreased 11% to $96.6 million, due to lower sales volume in the company’s Jordanian poultry product line as a result of lower production. Gross profit declined 9% to $14.5 million.“Opportunities in health and wellness, convenience and new distribution channels continue to arise, and we will continue to make investments in global initiatives for fresh and prepared products that will allow us to continue to differentiate ourselves within the industry,” Mr. Abu-Ghazaleh said.