Fyffes profits dropped by 65 per cent in 2006 and the company blamed increased fuel costs and the new EU tariff on banana imports.
The Irish Republic-based international fruit distributor, which spun off its general produce unit at the end of last year, reported a fall in net income to €29.3 million €83m in 2005. Earnings included both the new general-produce company, Total Produce, and the tropical-fruit unit that retains the Fyffes name.
The EU banana tariff cost Fyffes €41m euros last year, the company said, before unveiling aims to double the size of its remaining business through organic expansion and acquisition within the next five years.
“It's been a difficult year because of the extra costs,'' chairman David McCann said in an interview. “Over time, banana prices are going to have to go up.”
Sales increased 11 per cent to €2.42bn, comprising €555m from Fyffes and €1.86bn from Total Produce.
Profit at Fyffes was less than expected, implying “a weak second half performance from the banana business in 2006,'' analyst Robert Brisbourne at Merrion Stockbrokers in Dublin is quoted as saying. Total Produce, however, performed better than expected, with profit up 3.1 per cent to €36.1m.
Fyffes transferred real estate into Blackrock International Land Plc last year to take advantage of increased demand for property in Ireland.
