Greenyard has released a trading update revealing that its sales fell year-on-year in the first quarter, covering the three-month period of April-June 2018.
First-quarter sales came in at €1.09bn, down 1.5 per cent on the same period of 2017, with fresh sales falling 2.4 per cent to €884.7m.
'The solid sales increase in the Bakker operations, the Netherlands and France could not offset the decline in sales in Germany, Belgium and Poland,' Greenyard outlined when discussing its fresh segment.
While overall underlying volume demand remained stable compared to the opening quarter of 2017, a number of factors are 'weighing down' on Greenyard’s profitability, the group noted.
These include the recent frozen product recall following the possible listeria contamination, with the recall and related costs negatively impacting on financials.
'We have no indications at this point in time to change our estimated amount of €30m (net after insurance), of which less than 20 per cent will impact our full year REBITDA.
'The exceptional warm and dry summer period triggers irregularities in harvesting which results in fluctuations in volumes and prices of commodities thus impacting the financial performance of our Fresh and Long Fresh segments,' Greenyard continued. 'In the Long Fresh sector, for some products, potential shortages between 30 per cent and 50 per cent are expected.'
Greenyard noted that its Fresh markets experienced continued challenging pricing competition.
Based on preliminary financial information and projections, and based on current price levels, Greenyard has estimated that its underlying full year REBITDA will be around 25 per cent below last year’s profitability, instead of growing 10 per cent as predicted in its 2 May statement.
“Despite only a slight decrease in sales, this quarter was marked by longer than expected pricing pressure and competition in our markets, unforeseen factors such as the recall for the potential Listeria contamination and the exceptional weather circumstances,' explained Hein Deprez, Greenyard's CEO. 'Based on new forecasts, including the above elements, we revise our profitability guidance for AY 2018/19, well below last year’s profitability, and have implemented action plans to restore profitability going forward. Moreover and in view of deleveraging Greenyard’s balance sheet, the board of directors has requested management to review the strategic options of its business portfolio.
'Looking ahead, we remain firmly focused and committed to further strengthening our global operations while driving profitable growth over the long-term, and are taking the necessary steps while ensuring the support of all our stakeholders,' he added.
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