Chiquita anticipates that its 2010 first quarter results will be “substantially lower” than during the same period of last year as a result of European banana pricing being hit by the effects of a harsh winter and depressed economic conditions.
In a trading update, the US-based company said that earnings were expected to show a drop in the first quarter results, although it stressed it was confident of still reaching its stated full-year 2010 target for comparable income of between US$110m and US$120m.
Chiquita said that European banana pricing, which is set weekly, had not followed the normal pace of seasonal price improvements and was approximately 11 per cent lower than during the first quarter of 2009.
Company chairman Fernando Aguirre said that European banana pricing had been “negatively impacted by the harshest winter weather in 30 years and depressed economic conditions which have affected commerce all over Europe, particularly in the south”.
“We expect banana pricing to strengthen in comparison to 2009 levels as the year progresses, as tightening industry supplies in Latin America and Asia begin to restore the balance of supply and demand,” he said.
Mr Aguirre said Chiquita was “confident” of achieving its full-year 2010 target despite the expected fall in first-quarter earnings, explaining that the company anticipated an improved in the second quarter of the year compared with the same period of 2009.
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