Credit ratings group Fitch Ratings has pushed up Dole Food Company's Issuer Default Rating (IDR) following the announcement of its second quarter results at the end of July.
In an announcement, Fitch said that it had improved Dole's credit rating from a 'B' to a 'B+', as a result of the positive earnings increase recorded through the quarter (up to US$83m from US$34m last year), as well as revenue growth of 10 per cent.
Fitch noted that a 'B' rating is a speculative rating, or 'junk', that indicates there is some default risk.
The credit group stated that the improvement in the fresh produce giant's rating was due to an improved credit profile, a focus on debt reduction and good financial flexibility.
'Furthermore, Fitch believes Dole's current liquidity and internal cash flow generation will more than adequately cover its working capital, capital expenditures and other funding requirements in the near term,' Fitch reported.
'Dole's restructuring efforts in its fresh fruit operations should help minimise the future effect of pricing volatility and inflationary pressures,' Fitch added. 'The company realized US$14m of the total US$37m of annual cash savings expected for 2011 during the first half of fiscal 2011.'
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