Chiquita Brands International has reported second quarter 2006 net profit of $23 million (£12.23m), a significant decrease on the $64m net profit registered in the same quarter a year ago.
"The new banana import regime has presented us with challenges in Europe this year, particularly when compared to the pricing we achieved in that market in 2005," said Fernando Aguirre, chairman and chief executive officer. "However, we continue to sustain our premium versus the competition as we attempt to pass through higher tariffs and industry-related cost increases."
Aguirre added: "In North America, banana pricing showed meaningful improvement year-over-year, and we continued our expansion into higher-margin convenience outlets. Finally, we are very pleased with the growth, innovation and profit improvements at Fresh Express, which has proven that it is a perfect fit with Chiquita's overall vision to become a consumer-driven leader in healthy fresh foods."
Net sales were up to $1.2 billion, from $1bn in the second quarter 2005. The increase was “partly offset” by lower banana pricing in Europe and lower banana volume in both Europe and North America.
In the company's banana segment, which includes the sourcing, transportation, marketing and distribution of bananas, net sales were $512m, down 10 per cent year-on-year.
Banana operating income was adversely affected by $38m from lower European local banana pricing, “attributable in part to increased banana volumes that have entered the market, encouraged by regulatory changes that expanded the duty preference for African and Caribbean suppliers and eliminated quota limitations for Latin American fruit”, said a statement.
Chiquita incurred $18m of net incremental costs associated with higher banana import tariffs in the EU. This consisted of approximately $31m of incremental tariff costs, reflecting the duty increase to €176 from €75 per metric tonne from January 1, 2006.
