Fyffes has raised its earnings forecasts due to the benefits it says it has derived from higher selling prices and favourable exchange rates.
The Dublin-based tropical fruit distributor said its underlying earnings for the year ended December 30, 2007 should come in at €17 million (£12.7m) in 2007, an improvement on the €15m (£9m) it predicted at half-year, results, in September.
Higher selling prices and the movement of exchange rates in Fyffes’ favour have offset fuel prices during the second half of its financial year.
And despite ongoing inflation in shipping and fuel costs, Fyffes anticipates a mid-single digit increase in earnings in 2008. This excludes the anticipated impact of its move into the US winter melon market, reported on freshinfo yesterday. "This target reflects anticipated improvements in the Group’s existing melon and pineapple operations, the benefit of more favourable average exchange rates and achieving the required increases in average selling prices," said a statement this morning.
Since the demerger from its general produce arm, Fyfes has focused on its pineapple, melon and banana businesses. The total investment made by Fyffes in the melon and pineapple businesses in the last 12 months amounts to €27m (£20.2m), including working capital advances of €7m (£5.2m), the company said.
The medium-term strategy is to double the size of the business in the five years ending 2011, and 75 per cent of growth is slated to come from acquisitions.
Fyffes has experienced a 15 per cent increase in core European banana volumes in the year, and recent tenders in the UK have seen it unofficially return to its previous position of leading banana supplier into this market.
