Tuesday 1st May 2012, 14:48 London
Fresh Del Monte sees Q1 profit climb
Group's year-on-year net income grows during the opening quarter despite falling sales across all business segments
Multinational giant Fresh Del Monte has revealed that its net income climbed through the first three months of 2012 (Q1), up from US$55.2m (€41.7m) to US$62.5m (€47.2m), despite falling sales.
According to the US-based company's financial statement, net sales for the quarter ended 30 March were US$897.9m (€678m), compared with US$974m (€736m) in the prior year period. The fall was attributed to lower net sales across all of Del Monte's business segments, primarily due to lower sales volume in the group's other fresh produce business and lower sales volumes of bananas in the Middle East and Asia regions.
For bananas, net sales dropped 7 per cent to US$397.5m (€300m), compared with US$427.5m (€323m) in the first quarter of 2011, primarily due to lower sales volume in the Middle East and Asia, and lower selling prices in North America.
In the other fresh produce segment, sales decreased 7 per cent to US$421.1m (€318m), compared with US$452.6m (€342m) in the first quarter of 2011, the result of planned restructuring in the tomato and melon product lines and lower supply of fruit in Del Monte's non-tropical product line, due to less favorable growing conditions in Chile – partially offset by higher volume and selling prices in the fresh-cut product line and higher selling prices in the gold pineapple product line.
"We made good strategic progress during the first quarter of 2012, while achieving solid earnings results for our shareholders," said Mohammad Abu-Ghazaleh, chairman and chief executive officer of Fresh Del Monte. "Our business was favourably impacted by our long-term initiative of assuming control of the sales and marketing function for Southern Europe, and by improvements in our logistics structure. Additionally, we saw continued growth in our fresh-cut produce business, and continued expansion of our operations internationally to bring our products closer to end customers.
"Despite these advances, our decisions to protect our margins resulted in lower net sales in our tomato and melon product lines and in our banana business in Northern Europe," he added. "However, with our emphasis on focused process and efficiency improvement and a strong balance sheet, we are confident we are on the right track to build long-term value."