Fresh produce giant Dole Food Company has announced that it slipped to a net loss of US$65.6m during the opening quarter of the year, down from net income of US$17.2m in the same period of 2012, the result of lower revenues, operating income and one-off charges.
Adjusted EBITDA stood at US$34m, including a one-off charge to fully provide for a previously announced EU general court antitrust charge of US$34m, while the company turned in an operating loss of US$0.1m, compared with income of US$28.4m in 2012.
“Compared with 2012, excluding this amount, adjusted EBITDA improved to US$68m from US$44m for Dole’s continuing operations,' said Dole president and COO Michael Carter. 'Dole’s first quarter performance is in line with our full-year expectations for 2013, at the low end of the guidance range of US$150m–US$170m.
“First quarter adjusted EBITDA from both of our remaining lines of business exceeded last year,' he continued. 'Earnings grew in all of our core fresh fruit product lines. Fresh vegetables performance improved largely due to a turn-around in the fresh-packed product line.”
Revenues fell 3 per cent from US$1.09bn to US$1.05bn, the company reported, with fresh fruit revenues up, but offset by lower pricing of banas in North America and pineapples in both North America and Europe.
“There is volatility in earnings from both of our fresh produce businesses, as we are currently seeing in the swing from the first quarter to the second quarter this year,” noted Carter. 'This volatility is especially pronounced in our legacy strawberry business, where we expect earnings to be down by US$15m–US$20m in the first half of 2013, compared to 2012. During the last six months our strawberry growing regions in California have experienced extreme warm weather followed by unusual cold weather and now warm weather again.
'As for full year 2013, we expect the overall lower earnings in the bananas and berries product lines to put pressure on our expected Adjusted EBITDA at the low end of the guidance range. The impact of higher expected volumes in these product lines is more than offset by expected lower prices and higher costs.”
The US-based group noted that, with the sale of its worldwide packaged foods and Asian fresh produce segments to Itochu on 1 April, these businesses were now considered as discontinued operations.
Carter insisted that, with its new, streamlined operations, Dole had made an 'extraordinary' start to 2013, with China's quickfire approval of the Itcohu deal and the subsequent monetary gain meaning increased financial flexibility.
'We are very excited and very optimistic about the long-term future of the new Dole and its prospects,' he added. 'Dole remains an industry leader in the sourcing, distribution and marketing of bananas, pineapples and other tropical and deciduous fruits, packaged salads, fresh-packed vegetables and fresh berries. With our now more flexible capital structure and the eventual lower cost structure from right-sizing our organisation, Dole will be well positioned to pursue growth opportunities.”
