Fyffes is warning that it will only hit the full-year earnings target it announced in March if EU banana-import tariff reform is implemented this year.
The fresh produce multi-national issued a stock exchange announcement on Monday in which it highlighted difficult trading conditions since its last trading update on 5 March. The statement read: “Selling prices, particularly in continental Europe for the period since then, have been significantly lower than anticipated.”
However, it said that it is maintaining its target for full-year earnings before interest, taxes and amortisation (EBITA) announced in March of €14 million-€18m (£12.28m-£15.78m), as it is including the anticipated reduction in EU import duties as per the agreement reached in December 2009 for a reduction from €176 a tonne to €114.
According to some analysts, even March’s trading update was well down on earlier forecasts and share prices fell eight per cent overnight following this week’s stock exchange announcement.
Fyffes also said in Monday’s statement: “Reflecting difficult market conditions in the year to date, the spread of the group’s full-year profit target is expected to be significantly less weighted towards the first six months than in recent years. Achieving the target result for the year is based on Fyffes achieving necessary adjustments in selling prices and costs. In addition, the group has reduced import volumes and further reductions are planned during the remainder of the year.”
