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Financial report shows Del Monte’s shift away from banana focus

CORAL GABLES, FL–(BUSINESS WIRE)–Fresh Del Monte Produce Inc. BB #:111187 today reported financial results for the fourth quarter and year ended December 27, 2019. For the full year 2019, the Company reported earnings per diluted share of $1.37, compared with a loss per diluted share of $0.45 for the full year 2018.

Adjusted earnings per diluted share were $1.12 for the full year 2019, compared with adjusted earnings per diluted share of $0.40 for the full year 2018. The Company reported a loss per diluted share of $0.54 in the fourth quarter of 2019, compared with a loss per diluted share of $0.70 in the fourth quarter of 2018. Adjusted loss per diluted share was $0.45 in the fourth quarter of 2019 and 2018.

“In 2019, we benefited from our 2018 initiatives to realign certain production units, as well as early returns on our 2019 strategic shift to focus on becoming a value-added and more diversified Company,” said Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer.

“The emphasis on strengthening our core businesses led to higher gross margins and increased profitability. We also saw continued demand in our value-added fresh-cut and avocado product lines. Fresh Del Monte Produce is a different company today than it was a year ago. While we are encouraged by these results, we believe our transformation process will continue as we drive innovation and growth in our value-added businesses and leverage our core products to drive consistent revenue and earnings growth for the long-term.”

Net sales for the full year 2019 were $4,489.0 million, compared with $4,493.9 million in 2018. The decrease in net sales for the full year 2019 were primarily the result of lower net sales in the Company’s banana business segment, offset by an increase in net sales in the Company’s fresh and value-added business segment.

Net sales for the fourth quarter of 2019 were $1,025.2 million, compared with $1,045.9 million in the fourth quarter of 2018. The decrease in net sales in the fourth quarter of 2019 was primarily due to lower net sales in the Company’s fresh and value-added business segment as a result of its subsidiary, Mann Packing’s voluntary product recall in November 2019, and unfavorable exchange rates.

Full Year 2019 Business Segment Performance (As reported in business segment data)

Fresh and Value-Added Products
Net sales for the year were $2,704.4 million, compared with $2,654.7 million in the prior year. The increase in net sales was principally as a result of higher net sales in the Company’s fresh-cut, avocado, vegetables and prepared food product lines. The increase was partially offset by lower net sales in the Company’s pineapple, non-tropical fruit, melon and tomato product lines. Volume was 6% lower. Gross profit for the year was $194.7 million, compared with gross profit of $190.0 million in 2018.

Gold pineapple – Net sales decreased 7% to $454.8 million. Volume decreased 12%. Pricing increased 6%. Unit cost was 4% higher.

Fresh-cut fruit – Net sales increased 3% to $524.4 million. Volume increased 3%. Pricing was in line with the prior year period. Unit cost was 1% lower.

Fresh-cut vegetables – Net sales increased 9% to $455.9 million. Volume increased 5%. Pricing increased 4%. Unit cost was 9% higher.

Avocados – Net sales increased 16% to $380.7 million. Volume increased 5%. Pricing increased 10%. Unit cost was 14% higher.

Non-tropical – Net sales decreased 14% to $195.9 million. Volume decreased 16%. Pricing increased 3%. Unit cost was 3% lower.

Vegetables – Net sales increased 17% to $176.6 million. Volume increased 19%. Pricing decreased 2%. Unit cost was 2% lower.

Prepared food – Net sales increased 5% to $279.6 million, primarily due to higher sales volume in North America, Europe and the Middle East, as a result of the Company’s increased focus on value-added products.

Bananas
Net sales for the year were $1,656.0 million, compared with $1,703.1 million in 2018. The decrease in net sales was primarily due to lower sales volume in North America, Asia and Europe, partially offset by higher net sales in the Middle East. Volume was 4% lower. Gross profit for the year was $97.1 million, compared with gross profit of $84.1 million in 2018. Unit cost was in line with the prior year period.

CORAL GABLES, FL–(BUSINESS WIRE)–Fresh Del Monte Produce Inc. BB #:111187 today reported financial results for the fourth quarter and year ended December 27, 2019. For the full year 2019, the Company reported earnings per diluted share of $1.37, compared with a loss per diluted share of $0.45 for the full year 2018.

Adjusted earnings per diluted share were $1.12 for the full year 2019, compared with adjusted earnings per diluted share of $0.40 for the full year 2018. The Company reported a loss per diluted share of $0.54 in the fourth quarter of 2019, compared with a loss per diluted share of $0.70 in the fourth quarter of 2018. Adjusted loss per diluted share was $0.45 in the fourth quarter of 2019 and 2018.

“In 2019, we benefited from our 2018 initiatives to realign certain production units, as well as early returns on our 2019 strategic shift to focus on becoming a value-added and more diversified Company,” said Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer.

“The emphasis on strengthening our core businesses led to higher gross margins and increased profitability. We also saw continued demand in our value-added fresh-cut and avocado product lines. Fresh Del Monte Produce is a different company today than it was a year ago. While we are encouraged by these results, we believe our transformation process will continue as we drive innovation and growth in our value-added businesses and leverage our core products to drive consistent revenue and earnings growth for the long-term.”

Net sales for the full year 2019 were $4,489.0 million, compared with $4,493.9 million in 2018. The decrease in net sales for the full year 2019 were primarily the result of lower net sales in the Company’s banana business segment, offset by an increase in net sales in the Company’s fresh and value-added business segment.

Net sales for the fourth quarter of 2019 were $1,025.2 million, compared with $1,045.9 million in the fourth quarter of 2018. The decrease in net sales in the fourth quarter of 2019 was primarily due to lower net sales in the Company’s fresh and value-added business segment as a result of its subsidiary, Mann Packing’s voluntary product recall in November 2019, and unfavorable exchange rates.

Full Year 2019 Business Segment Performance (As reported in business segment data)

Fresh and Value-Added Products
Net sales for the year were $2,704.4 million, compared with $2,654.7 million in the prior year. The increase in net sales was principally as a result of higher net sales in the Company’s fresh-cut, avocado, vegetables and prepared food product lines. The increase was partially offset by lower net sales in the Company’s pineapple, non-tropical fruit, melon and tomato product lines. Volume was 6% lower. Gross profit for the year was $194.7 million, compared with gross profit of $190.0 million in 2018.

Gold pineapple – Net sales decreased 7% to $454.8 million. Volume decreased 12%. Pricing increased 6%. Unit cost was 4% higher.

Fresh-cut fruit – Net sales increased 3% to $524.4 million. Volume increased 3%. Pricing was in line with the prior year period. Unit cost was 1% lower.

Fresh-cut vegetables – Net sales increased 9% to $455.9 million. Volume increased 5%. Pricing increased 4%. Unit cost was 9% higher.

Avocados – Net sales increased 16% to $380.7 million. Volume increased 5%. Pricing increased 10%. Unit cost was 14% higher.

Non-tropical – Net sales decreased 14% to $195.9 million. Volume decreased 16%. Pricing increased 3%. Unit cost was 3% lower.

Vegetables – Net sales increased 17% to $176.6 million. Volume increased 19%. Pricing decreased 2%. Unit cost was 2% lower.

Prepared food – Net sales increased 5% to $279.6 million, primarily due to higher sales volume in North America, Europe and the Middle East, as a result of the Company’s increased focus on value-added products.

Bananas
Net sales for the year were $1,656.0 million, compared with $1,703.1 million in 2018. The decrease in net sales was primarily due to lower sales volume in North America, Asia and Europe, partially offset by higher net sales in the Middle East. Volume was 4% lower. Gross profit for the year was $97.1 million, compared with gross profit of $84.1 million in 2018. Unit cost was in line with the prior year period.