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Fresh Del Monte Produce reports solid third quarter

CORAL GABLES, Fla.–(BUSINESS WIRE)– Fresh Del Monte Produce Inc. BB #:111187, today reported financial results for the third quarter ended September 27, 2019. The Company reported earnings per diluted share of $0.38 for the third quarter of 2019, compared with a loss per diluted share of $0.44 in the third quarter of 2018.

Adjusted earnings per diluted share were $0.35 in the third quarter of 2019, compared with an adjusted net loss per diluted share of $0.14 in the third quarter of 2018.

The Company’s Board of Directors declared an interim cash dividend of eight cents ($0.08) per share, payable on December 6, 2019 to shareholders of record on November 13, 2019. This is an increase of two cents ($0.02) per share from the interim cash dividend of six cents ($0.06) paid to shareholders on September 6, 2019.

“Positive trends continue for Fresh Del Monte with a strong financial performance in the third quarter of 2019,” said Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer. “Our strategic focus on stabilizing our core business, innovative diversification, and transforming Fresh Del Monte to a value-added Company has been building throughout 2019. We are emphasizing value-added margin growth in all product lines, generating momentum with global partnerships, introducing trend-forward products, and are opening new state-of-the-art facilities in Mexico and Japan. Our retail store concept in the U.S. will be coming soon. We extended our credit facility to 2024. We believe that these results, coupled with increasing demand for healthy, fresh and convenient foods, have given Fresh Del Monte a strong competitive advantage in the marketplace and a solid position from which to pursue our vision of inspiring healthy lifestyles.”

Net sales for the third quarter of 2019 were $1,070.2 million, in line with $1,069.5 million in the third quarter of 2018. The increase in net sales in the fresh and value-added business segment was offset by lower sales in the Company’s banana business segment, and weakening currencies against the U.S. dollar in selling countries.

Gross profit for the third quarter of 2019 was $74.7 million, compared with $52.6 million in the third quarter of 2018. The increase in gross profit was primarily attributable to higher gross profit in all of the Company’s business segments, principally due to higher selling prices in the Company’s fresh and value-added and banana business segments. The increase was partially offset by lower sales volume, higher fruit production and procurement costs, as well as the negative impact of unfavorable exchange rates.

Operating income for the third quarter of 2019 was $27.1 million, compared with operating loss of $11.3 million in the third quarter of 2018. The increase in operating income was the result of higher gross profit, lower asset impairment and other charges, net, and a gain on disposal of property, plant and equipment, net. Adjusted operating income was $25.1 million in the third quarter of 2019, compared with adjusted operating income of $3.2 million in the third quarter of 2018.

Net income attributable to Fresh Del Monte Produce Inc. for the third quarter of 2019 was $18.1 million, compared with net loss attributable to Fresh Del Monte Produce Inc. of $21.5 million in the third quarter of 2018. Adjusted net income was $16.6 million in the third quarter of 2019, compared with adjusted net loss of $7.0 million in the third quarter of 2018. The change was primarily the result of higher operating income.

Third Quarter 2019 Business Segment Performance and Selected Financial Data

Fresh and Value-Added Products
Net sales for the third quarter of 2019 increased to $652.9 million, compared with $639.9 million in the third quarter of 2018. The increase in net sales was primarily due to higher net sales in the Company’s fresh-cut fruit, avocados and vegetables product lines. Gross profit for the third quarter of 2019 increased to $53.9 million, compared with gross profit of $42.3 million in the third quarter of 2018.

Gold pineapple – Net sales were $102.0 million, compared with $112.3 million in the prior year period. Volume was 20% lower. Pricing was 14% higher. Unit cost was 7% higher.

Fresh-cut fruit – Net sales were $145.3 million, compared with $131.7 million in the prior year period. Volume increased 10%. Pricing was 1% higher. Unit cost was 2% lower.

Fresh-cut vegetables – Net sales were $123.9 million, compared with $122.8 million in the prior year period. Volume was 9% lower. Pricing was 11% higher. Unit cost was 9% higher.

Avocados – Net sales were $98.0 million, compared with $84.7 million in the prior year period. Volume decreased 8%. Pricing increased 26%. Unit cost was 28% higher.

Vegetables – Net sales were $45.6 million, compared with $39.5 million in the prior year period. Volume increased 9%. Pricing was 6% higher. Unit cost was 1% lower.

Non-tropical fruit – Includes the Company’s grape, apple, citrus, berry, pear, peach, plum, nectarine, cherry and kiwi product lines. Net sales were $32.2 million, compared with $41.6 million in the prior year period. Volume decreased 22%. Pricing was in line with the prior year. Unit cost was 2% lower.

Prepared food – Includes the Company’s prepared traditional products, and meals and snacks product lines. Net sales increased in both product lines due higher sales volume. Gross profit was impacted by lower selling prices in the Company’s traditional product line.

Bananas
Net sales for the third quarter of 2019 decreased to $385.8 million, compared with $397.4 million in the third quarter of 2018, principally due to lower net sales in North America and Asia, partially offset by higher net sales in the Middle East and Europe. Volume was 7% lower and worldwide pricing was 4% higher than the prior year. Gross profit for the third quarter of 2019 increased to $16.5 million, compared with $10.3 million in the third quarter of 2018. Unit cost was 3% higher than the prior year period.

About Fresh Del Monte Produce Inc.
Fresh Del Monte is one of the world’s leading vertically integrated producers, marketers and distributors of high-quality fresh and fresh-cut fruit and vegetables, as well as a leading producer and distributor of prepared food in Europe, Africa and the Middle East. Fresh Del Monte markets its products worldwide under the DEL MONTE® brand (under license from Del Monte Foods, Inc.), a symbol of product innovation, quality, freshness and reliability for over 125 years. The Company also markets its products under the MANNTM brand and other related trademarks. Fresh Del Monte Produce Inc. is not affiliated with certain other Del Monte companies around the world, including Del Monte Foods, Inc., the U.S. subsidiary of Del Monte Pacific Limited, Del Monte Canada, or Del Monte Asia Pte. Ltd.