Chiquita Brands International, Inc. has reported an eight per cent year-on-year increase in net sales for the third quarter of 2006, to $1 billion (£532.5 million).
However, the company reported a quarterly net loss of $96m, including a noncash charge of $43m, or ($1.02) per share, for goodwill impairment at Atlanta AG, the company's German distributor.
"Our third quarter results were disappointing and worse than expected for several reasons," said Fernando Aguirre, chairman and chief executive officer. "First, we recorded a noncash charge for goodwill impairment at Atlanta AG due to a decline in its business performance resulting primarily from intense pricing pressure in Germany.
“Second, temperatures during the third quarter reached record highs across much of northern Europe. This unusually hot weather reduced consumer demand for bananas, depressed prices and contributed to substantial price weakness in trading markets, where we incurred substantial losses on the sale of temporary excess supply from Latin America.
“Third, beginning in September, our Fresh Express operations experienced lower sales and unforeseen costs due to consumer concerns regarding the safety of fresh spinach in the United States, despite the fact that no confirmed cases of consumer illness were linked to our Fresh Express products."
Aguirre continued, "While the banana market dynamics in Europe have been more difficult than expected, we continue to sustain our leadership position in the premium quality segment and believe we are well-positioned to win in this market in the long-term. In addition, we continued to drive sustained progress in other key markets.
“Our North American banana pricing remained strong, reflecting successful customer contract negotiations, and our Fresh Express business continued to grow as distribution gains and new product introductions drove strong year-over-year volume growth in retail value-added salads in spite of the spinach issue."
