Fresh Del Monte Produce has reported worse-than-expected results, as a strong dollar and poor weather conditions contributed to a tough first quarter.

The company reported net income of $34.9 million (£23.8m) compared to $63.6m in the same period a year ago. Net sales fell marginally from $894.9m a year ago to $879.7m.

Analyst Reuters had expected revenue of $917.6m for the period but figures were hit by a stronger US dollar, severe weather conditions in its banana and gold pineapple production areas in Costa Rica and weaker melon prices.

Worldwide banana pricing rose seven per cent, while melon pricing fell 19 per cent due to an oversupply of melons in the market and the weak economy.

Gross margin fell to 9.5 per cent from 10.8 per cent in the corresponding 2008 quarter.

Fresh Del Monte's chairman and chief executive officer, Mohammad Abu-Ghazaleh, said: "While we made progress toward our long-term initiatives, our achievements were overshadowed by a number of challenges during the quarter that negatively affected our financial performance. These challenges included severe weather conditions in our banana and gold pineapple production areas in Costa Rica, and in our banana production areas in Guatemala. These challenges led to disruptions in our operations, a significant decrease in fruit quality, along with higher fruit production and procurement costs.

“We also experienced a dramatic reduction in our melon category performance, the result of significantly lower melon selling prices, primarily due to an oversupply in the market and the difficult economic environment.

“There continues to be a global increase in demand for products that provide consumers with value and are healthy and nutritious. With this in mind, we remain focused on our strategy of maintaining our strong balance sheet, strengthening leadership positions in key products, further building our core product categories, and expanding our brand leadership in world markets. We firmly believe many of the challenges we faced in the quarter were temporary and that our long-term prospects remain bright.”

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