Fresh produce multinational Chiquita Brands International has reported on its financial and operating results for the third quarter of the year, with sales falling and net loss more than doubling on the same period of 2011.
According to the Charlotte, US-based company, net sales fell to US$714m (€557m) from US$723m (€565m) last year, primarily due to lower pricing in bananas and the decrease in the euro.
Net loss more than doubled from US$29m (€23m) to US$67m (€52m), with Chiquita citing a number of one-time items including US$16m (€12m) in charges related to restructuring activities, US$28m (€22m) in impairment and related charges for an investment in Danone Chiquita Fruits SAS, and US$6m (€4.7m) in charges related the the group's headquarters relocation.
'Chiquita's third quarter results exceeded our internal expectations,' said recently-appointed president and CEO Edward Lonergan (pictured below). 'While it was a challenging quarter, we made progress in positioning the company for future growth by becoming more competitive in our core banana and salads businesses.
'Although certain fundamentals suggest that supply and demand in bananas is becoming balanced and prices are rising, we face difficult pricing comparisons to 2011, particularly with respect to the impact of euro exchange rates, which, by itself, negatively impacted year-over-year income comparisons by US$10m (€7.8m) for the third quarter,' he continued. 'In salads, our retail volume reductions as compared to the year-ago periods have narrowed since the beginning of the year, and we believe that our entry into private label and additional salad products will further improve our results in 2013.'
By sector, banana sales dropped 2 per cent year-on-year to US$446m (€348m) and operating loss was US$2m (€1.6m), with lower base contract pricing in North America and lower US dollar equivalent pricing in Europe contributing to the fall.
Salads and healthy snacks remained stable year-on-year with sales standing at US$240m (€187m), with comparable operating income coming in at US$1m (€0.8m) from a loss of US$3m (€2.3m) last year.
'Chiquita made some difficult but necessary decisions this year prior to my arrival,' Lonergan noted. 'Focusing on the core businesses of bananas and salads is the correct strategy for the company at this time. I am committed to the strategy and believe these decisions will benefit stakeholders in the long run.
'We continue to believe the long term operating income margin targets we presented earlier this year are achievable in the next 24 to 36 months, and we are already seeing improved results from the new strategy,' he added. 'We have seen important customer wins in both bananas and salads, and most of the restructuring activities are already complete.'
In its outlook report, Chiquita said that it saw opportunities for growth in salads and bananas with recent contract wins, and added that it would fully realise the benefit of its restructuring activities – of which much is already complete – by 2013, with anticipated annual savings of US$60m (€47m).
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