Fresh Del Monte closed the 2018 campaign with varying results in its various segments. In the banana market, the company saw its turnover and volume drop. At the same time, it sold more avocados, although the price was disappointing. The acquisition of the American Mann Packing Company had a positive impact on its figures in various ways; however, it still recorded a net loss of 21.9 million Euro.
The turnover amounted to $ 4.5 billion, which was an increase of 10% compared to a year earlier. In the final quarter of the financial year, a higher turnover of 1 billion dollars was reached (Q4 2017: 953.7 million dollars). The increase in turnover is due to greater sales in the 'Other fresh' and 'Prepared food' segments. The recent acquisition of Mann Packing Company also contributed to the increase. In the banana segment, sales went down.
"We are recording higher sales in North America thanks to the acquisition of Mann Packing Company in 2018," said Mohammad Abu-Ghazaleh, Chairman and CEO. "This strategic acquisition accelerated our efforts to make our presence in the market more diverse." According to the CEO, the integration of this new company is going well. The situation in the North American market has been challenging, partly due to delays in the ports, a severe winter and a shortage of trucks in the US. Furthermore, the operational costs have increased.
The gross profit stands at $ 279.8 million (2017: $ 331.6 million). This drop is the result of higher costs for fruit and distribution in all segments within Fresh Del Monte. Banana sales declined, but this drop was partly compensated by a favorable exchange rate. The operating income stands at 38.6 million dollars (2017: 152.7 million dollars). The company recorded a loss of $ 21.9 million. A year earlier, the campaign came to a close with $ 120.8 million in the green. These figures reflect the lower operating income in combination with higher interest rates and higher costs.
Other Fresh
Net sales in this segment amounted to $ 2.4 billion, compared to $ 2 billion a year earlier. This increase is due to higher sales of fresh cut fruit and vegetables and an increase in both sales and the price of vegetables as a result of the acquisition of Mann Packing Company. Moreover, the turnover of the avocado line also increased. The volume was 17% higher, resulting in a gross profit of 180.2 million dollars, compared to $ 179.2 million in the red a year earlier.
The turnover generated from Gold pineapples declined by 1% to 487.9 million dollars. The volume increased by 2%, while the price was 3% lower. For processed fruit, there was a 3% increase in sales, with 510.6 million dollars in turnover. The volume rose by 2% and the prices were 1% higher. Processed vegetables yielded $ 433.2 million. The volume sold quadrupled. The prices were under pressure and were 21% lower. At the same time, the unit price fell by 23%.
Avocados recorded $ 329.2 million (+ 5%) in sales, mostly due to a larger volume (+33%). The price was on average 21% lower.
A 6% drop in turnover was recorded for non-tropical fruit, with a total of $ 221.5 million. The volume fell by 8%, while the price rose by 2%. The vegetables recorded a solid growth. Four times as much volume was sold, which caused the turnover to rise to $ 140.1 million.
Bananas
Lower sales figures in the Middle East and Europe resulted in a decline in revenue to 1.7 billion dollars (2017: 1.8 billion dollars). The volume dropped by 7%. This drop in sales was accompanied by a lower sales price in Europe. Higher prices were recorded in the Middle East and North America. Worldwide, the price rose by $ 0.45 (3%) to $ 14.50 per box. A year earlier, the average price was $ 14.05 per box.
Prepared Food
The 'Prepared Food' segment showed a slight increase in turnover, from 313.6 million dollars in 2017 to 347.8 million dollars last year. This is mainly due to the larger volume sold and a higher sales price in the vegetable line. The acquisition of Mann Packing Company also contributed to the growth. This good trend was tempered by the results in the processed pineapple line.
"Now in early 2019, we continue to focus on implementing our strategy and are firmly committed to transforming our business to meet customer needs," said Mohammad Abu-Ghazaleh.