Fyffes has announced a year-on-year fall in operating profit in the six months to June 30, 2007, down to £8.6m on group revenue of £193.5m.
Group revenue has in fact risen significantly from £131.5m in the same period last year, although the two periods are not directly comparable as sales to Total Produce plc are included as third party revenue in 2007, while 2006 sales prior to the demerger of Fyffes general produce and distribution business were eliminates as inter-segment revenue.
The strong top-line organic growth in the year to date reflects mid to high teens percentage increases in banana and pineapple volumes. However, the decline in margin is due to factors previously highlighted by Fyffes, including lower banana prices and higher operating costs. These issues were partially offset by savings arising from new shipping arrangements and the impact of favourable exchange rates.
The group’s share of losses in Nolem, its Brazilian winter melon joint venture, amounted to £1.9m in the six months. The group’s financial statement said: “Significant internal resources have gone into addressing Nolem’s business in order to deliver an improved result in the forthcoming season.”
Fyffes’ pineapple business delivered an improved result year on year, reflecting a substantial volume increase combined with slightly lower costs.
Group chairman David McCann said: “The group’s target for its full-year earnings remains in line with its previous announcement and these first half results are consistent with this. Management remains focused on delivering its five-year growth objectives and is pleased to have achieved significant top-line organic growth in the year to date.”
