US-based fresh produce group Chiquita Brands International has released its financial and operating results for the third quarter of 2011, reporting net sales of US$723 million and a net loss of US$29m.
The company said the loss included US$11m of refinancing costs, including tender and call premiums and unamortised financing fee write-offs, in connection with its July debt refinancing.
Although net sales in bananas increased by 5 per cent to US$453m during the quarter, salads and healthy snack sales dropped by 5 per cent to US$240m, including a comparable loss of US$3m. The latter result contributed to an overall year-on-year fall in quarterly sales of 1 per cent to US$723m.
“Overall, our results continued to reflect the trends we have seen all year,” said Fernando Aguirre, Chiquita chairman and chief executive officer, in a statement.
“Bananas in North America continued to perform well, Europe is starting to recover, and salads were disappointing but we've taken corrective action to reverse that trend.”
Aguirre said that “as expected”, North America had delivered higher prices and volumes for bananas, while European market pricing was “soft”. However, he said Chiquita’s results benefitted from “much more favourable” currency rates and higher core market volume.
While the company’s salad performance was “below expectations”, Aguirre said Chiquita had begun to close the gap on sales volume comparisons compared with the year before.
He claimed the operating costs “did not yet reflect the full benefit of recent realignment decisions” and “were higher due to product supply related costs and inefficiencies”, much of which were expected to be temporary.
Aguirre added: “In October, retail salad volumes nearly returned to last year’s levels, and continued recovery of this business will help deliver a modest improvement in overall Salads and Healthy Snacks segment results.
“Importantly, we continue to focus on driving down costs throughout our entire product supply chain to enhance our performance in a challenging environment.
“As a result, we continue to expect a significant improvement over last year’s results to deliver our fourth year of consecutive profitability.”
Due to the strength of Chiquita’s financial position, Aguirre said Chiquita was also reducing its debt by an additional US$50m through the redemption of senior notes.