Chiquita Brands International saw improved year-on-year profitability through the second quarter of the year (ended 30 June), as the group reaped the benefits of efficiency improvements and an increased focus on core activities.
Net income for the three-month period came in at US$31m, up from US$6m in the same period of 2012, although net sales fell from US$833m last year to US$812m.
'We continue to execute against our 'focus on the core' strategy that, in the second quarter, resulted in strong operating performance,' said Ed Lonergan, Chiquita's president and chief executive officer.
'The market for bananas is balanced and our banana business is performing well,' he outlined. 'We experienced improved profitability in this segment as a result of volume growth in North America, our ability to maintain prices in Europe, and the previously announced efficiency improvements in our value chain and organisational structure.'
By segment, banana sales actually fell by 3 per cent to US$519m, as did sales in the other produce operation (down from US$49m to US$34m), but there was better news in salads and healthy snacks where sales climbed from US$252m to US$260m.
'We are reporting our first quarterly year-over-year volume growth in value-added salads since 2008,' Lonergan noted. 'Our salad business delivered volume growth in branded, private label and foodservice products. Our Salad and Healthy Snacks segment quarterly profitability was negatively impacted by transition costs at our Midwest plant consolidation and by higher raw product costs driven by unfavourable growing conditions.
'Lastly, we continued to improve our balance sheet by fully repaying our revolver, which along with earnings improvement substantially reduced our leverage.'
Looking ahead, Chiquita said that the company has continued to see tangible progress from its restructuring initiatives, but despite results in the first six months of 2013 that exceeded expectations, it had not changed internal expectations for full-year results.
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