Del Monte records lower sales, better profits
Fresh Del Monte Produce Inc. reported an increase in profits despite lower sales for the third quarter of 2012 compared to the same period in 2011.
Continued low demand for bananas in the Middle East and Europe accounted for the drop in net sales for the quarter, coming out to US$788.8 million compared with US$795.2 million in the same 2011 period.
Higher selling prices for bananas and low ocean freight costs made up for low sales, however, and bumped up company gross profits for the quarter. Gross profit was $74.4 million compared with $62.9 million in the third quarter of 2011.
Mohammad Abu-Ghazaleh, chairman and chief executive officer, said he was very pleased with the results of the third quarter and the growth of the global fresh-cut business.
"The decision to take full control of the marketing, sales and distribution of our products at the beginning of the year in southern Europe contributed to our improved performance. We also realized efficiency improvements in our logistics and cost control initiatives that directly improved our bottom-line performance," Abu-Ghazaleh said.
Bananas accounted for the greatest sales area for the quarter, despite a 4% decrease from US$375.1 million to US$359.8 million. Gross profit did, however, increase with $12 million earned compared to a $1 million loss in the third quarter of 2011.
In other produce, net sales dropped slightly from US$337 million to US$335.2 million. The drop resulted from planned volume reductions in the melon product line and lower selling prices for gold pineapple. Gross profit in the area also dropped for the quarter from US$52.1 million to US$50.8 million.
The company's total debt decreased from US$215.5 million at the end of 2011 to US$28.4 million at the end of the third quarter of 2012. On October 25, 2012, the company entered into a new five-year, $500 million syndicated senior unsecured revolving credit facility.