Global fresh fruit producer, marketer, and distributor Fresh Del Monte Produce Inc has announced a drop in net sales and gross profit for the second quarter of 2006, compared with the same period last year.
The decline in sales from $922.8 million (£484.2m) to $907.1m (£476m) has been attributed to “lower sales in the company’s other fresh produce business segment”. Meanwhile the drop in gross profit from $220.5m (£115.7m) to $139m (£72.9m) was said to result from “continued higher costs related to fuel, raw materials, packaging, labour and transportation” as well as the lower sales.
For the second quarter of 2006, Fresh Del Monte Produce had a net loss of $17.8m (£9.34m), or $0.31 (£0.16) per diluted share, compared with a net income of $46.5m, or $0.80 per diluted share in the 2005 period. A total loss of $1.6m (£840,000) was reported for the first half of 2006, due to increased production and transportation costs, along with asset impairment and other charges.
Earnings for the first six months of 2006 are reported as $0.55 (£0.29) per diluted shared, compared with earnings per diluted share of $1.84 (£0.97) excluding an asset impairment charge of $0.04 per diluted share, for the same period last year.
Chairman and chief executive officer Mohammad Abu-Ghazaleh said: “Our earnings in the second quarter indicate that we are operating in what is the most difficult environment of the last ten years.
“However, we believe the steps taken over the past six months are preparing us for these changing times. Our ability to increase North American banana contract pricing, our aggressive implementation of cost-cutting programs, and our increased strategic investments in our business collectively assisted us in partially offsetting the impact of higher operating costs during the quarter. This demonstrates that our strategy to transform our organization into a leaner, more efficient, more profitable and more focused enterprise is working.”
He added: “There are a number of difficulties we believe will continue to affect our industry during the remainder of 2006, including fuel, transportation, and raw material costs. Even so, we have managed effectively through changing environments before, and we continue to be confident as we make advancements toward our long-term vision of becoming the world’s leading supplier of healthful fresh and prepared food and beverages to consumers of all ages.”
