Chiquita Brands International president and chief executive Ed Lonergan has admitted that the group's results for the opening quarter of 2014 'Did not meet expectations'.
The fresh produce giant revealed in a news release that it swung to a GAAP net loss of US$25m for the quarter, down from net income of US$2m in the same period of 2013.
Comparable oprating income stood at US$7m, down from US$23m last year, while adjusted EBITDA was down to US$23m from US$39m.
Lonergan explained that unfavourable weather conditions had effected the group's results, but admitted that Chiquita had a responsibility to mitigate such events.
'While we are confident in our 2014 progress toward our long term financial targets and benefits from our 'return to the core' strategic plan, our first quarter results did not meet expectations,' he said. 'Drought conditions in Central America and winter storms in North America and over the Atlantic disrupted our value chain and market demand for our products.
'While we grew our North American banana volume in excess of 5 per cent compared to first quarter of 2013, shortfalls in contracted and owned farm supply required purchase of expensive weekly market fruit to serve our contracted business and resulted in inefficient shipping choices and short supply to our weekly market customers across countries.
'While weather impacts are a fact in our industry, our responsibility as leaders is to mitigate these risks.'
Lonergan also focused on the well-publicised merger with Fyffes.
'In addition to bringing together two complementary businesses, we believe that the combination with Fyffes, which we announced on March 10, 2014, will fundamentally improve our ability to deal with weather risks and event-driven supply volatility in our bananas business due to the broader growing and shipping profiles of the combined entities,' he said.
'Last week, ChiquitaFyffes filed a registration statement with the SEC in connection with the proposed combination, and we have begun the regulatory review process in both North America and Europe. 'We plan to close the transaction by the end of the year and remain excited about the opportunities for the combined business. 'Also last week, we began implementation of efficiency and pricing actions in our salads business, supporting our long term profitability objectives for this business.'
