Dole Food Company, the world's largest producer and marketer of fresh fruit and vegetables, has revealed a mixed set of results for the first quarter ended 24 March 2012, with net income climbing but revenues and EBITDA falling.
Revenues decreased 4 per cent to US$1.6bn from US$1.7bn during the quarter, with fresh fruit revenues dropping primarily as a result of lower sales in the European ripening and distribution business and lower pricing for bananas sold in North America. These factors were partially offset by improved pricing for bananas in Asia, improved volumes of other fresh fruit sold in Asia, higher volumes of fresh pineapples sold worldwide and higher sales of Chilean deciduous fruit.
Fresh vegetables revenues increased 2 per cent, attributed to higher sales of fresh berries and packaged salads, partially offset by lower pricing for fresh-packed vegetables. Packaged foods revenues climbed 1 per cent, mainly thanks to higher sales of frozen fruit and healthy snacks in North America and improved pricing worldwide, partially offset by lower worldwide volumes of packaged fruit.
Adjusted Earnings Before Interest, Taxation, Depreciation and Amortisation (EBITDA) fell to US$71m from US$111m in the prior year, the group noted, although net income jumped from US$2m to US$17m.
'Our first quarter results were impacted by extraordinarily low prices in all of our major commodity vegetables,' said David DeLorenzo, Dole's president and CEO. 'Our packaged salads and fresh berries businesses had very strong results in the quarter, however, these gains were offset by the weaker performance in commodity vegetables.
'As anticipated, banana earnings were weaker due to lower pricing in North America and Europe, as well as higher fruit costs from Latin America, which more than offset a strong performance in Asia bananas,' he noted. 'Our packaged foods segment performed well, with Adjusted EBITDA increasing by 10 per cent. We are very pleased with the performance of our new Fruit Smoothie Shakers and Frozen Fruit Single-serve Cups, and have launched significant marketing campaigns in support of these new products.'
Meanwhile, DeLorenzo confirmed that Dole is to undergo a complete strategic review of its business, a move that could potentially result in the separation of some of its business units.
'As part of this review, the alternatives we may consider include a full or partial separation of one or more of our businesses through a spin-off or other capital markets transaction, as well as other alternatives that will enhance shareholder value,' DeLorenzo explained. 'We are committed to enhancing shareholder value and this review is a company priority.'
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