CORAL GABLES, FLA. — Fresh Del Monte Produce Inc. surpassed $4 billion in sales for the first time in company history, boosted in part by higher sales of avocados that helped to offset the negative impact of a global oversupply of bananas in the company’s fourth quarter.
|Mohammad Abu-Ghazaleh, chairman and c.e.o. of Fresh Del Monte|
“We have built an impressive foothold in North America with avocado sales 34% higher over the prior year,” said Mohammad Abu-Ghazaleh, chairman and chief executive officer, during a Feb. 23 earnings call with financial analysts. “However, these achievements were more than offset by an unusually strong banana production cycle in the last two months of 2015. That resulted in a substantial industry oversupply that overwhelmed already saturated global banana markets.”
For the fiscal year ended Jan. 1, net income attributable to Fresh Del Monte Produce was $62.4 million, or $1.18 per share on the common stock, down 56% from $142.4 million, or $2.54, the year before. Net sales were $4,056.5 million, up 3.3% from prior-year sales of $3,927.5 million.
The company’s banana segment posted net sales of $1,867.6 million for the year, an increase of 3.5% over the prior year, driven by higher sales in North America, Middle East and Asia, which were offset by a decrease in pricing due to unfavorable exchange rates and the oversupply of bananas in the fourth quarter. Gross profit for the segment fell 30% to $76.5 million for the full year.
“Today, I am happy to report the markets are better and pricing is climbing,” Mr. Abu-Ghazaleh said. “The oversupply was an unfortunate short-term situation that resulted in us missing several key financial targets in the fourth quarter and constrained our ability to deliver optimal earnings for the full year.”
For the other fresh produce segment, full-year net sales advanced 4.7% to $1,826.3 million, led by higher sales in the company’s fresh-cut and avocado product lines that offset declines in gold pineapple and non-tropical fruit. Gross profit declined 0.8% to $208.7 million.
Prepared food segment sales for the year fell by 4.1% to $362.6 million, due to lower sales in the company’s poultry product line, which partially were offset by gains in canned and processed pineapple product lines. Gross profit increased 26% to $57.1 million.
For the fourth quarter, the company posted a net loss of $73.1 million, which compared with a loss of $400,000 for the year-ago period. The 2015 results included a $66 million goodwill impairment charge related to the company’s North America tomato and vegetable business it acquired in 2003. Net sales for the quarter advanced 5.2% to $977.9 million from $929.3 million.“As we move forward into 2016, I am excited about our future prospects and look forward to continue pursuing our vision of having Fresh Del Monte Produce uniquely positioned to meet expanding worldwide consumer demand for healthful food products,” Mr. Abu-Ghazaleh said.