Ireland-based tropical fruit supplier Fyffes has reported that its melon business in the US is performedwell during the first six months of 2012, with the group suggesting the rise contributed to an overall increase in its underlying trading profit during the first half of the year.
The melon importbusiness in particular had continued to achieve strong organic growth, it said. 'Production capacity increased during the period through the purchase ofan additional farming operation in Guatemala and its marketing reach was expanded with the opening of a sales office on the US West Coast,' the group commented.
'While growing the business strongly, management also remained very focused on its operating costs and structures.'
Meanwhile, Fyffes has stated it will continue to increase its selling prices 'in all markets' as it seeks to reduce the impact of what it described as adverse exchange rate movements and the higher cost of both fuel and fruit itself.
Posting a healthy increase in revenue and operating profit as part of its half-year financial report, the group said it would increase its full-year target EBITA range for 2012 to €28m-€33m, up from €25m-€30m previously.
According to the report, total revenue including Fyffes' share of joint ventures was €92m or 20 per cent higher year-on-year between January and the end of June, amounting to €550.1m.
Sales were higher in each of the group's product categories – bananas, pineapples and melons – it said, driven mainly by further organic growth.
It also revealed that revenue had also benefited from favourable exchange rates when converting sales made in the UK and the US back into euros.
The acquisition of German distributor vanWylick in January 2011 also contributed to the increase in turnover.
As for its operating profit, Fyffes posted adjusted EBITDA of €28.1m in the first six months of 2012, up 36 per cent on the same period last year.
Adjusted EBITA, meanwhile, rose 31.2 per cent to €23.3m in the same period.
'The key drivers of the short term performance of Fyffes’ tropical produce operations, and its banana category in particular, are average selling prices, exchange rates and the costs of fruit, shipping and fuel, all of which can result in volatility in year on year profitability,' the company said.
'The increase in profits achieved in the first half of the year reflects, in particular, the further organic growth in each of the group's product categories and continued improvements and efficiencies throughout its operations.'
Chairman David McCann commented: 'Fyffes has delivered a strong increase in profits for the first half of the year, driven by further organic growth in each of its product categories.'
