Net loss for Chiquita in Q3
Multinational Chiquita has recorded a larger year-on-year loss of US$67 million for the third quarter of 2012,
but new CEO Edward F. Lonergan said this exceeded internal expectations.
"While it was a challenging quarter, we made progress in positioning the company for future growth by becoming more competitive in our core banana and salads businesses," Lonergan said in a release.
In October the company revealed to www.freshfruitportal.com that it would be exiting its deciduous business, which Lonergan clarified as relating just to table grapes. In terms of other fruits that are often labeled as 'deciduous', he said the company would remain in fresh cut apples.
"Chiquita made some difficult but necessary decisions this year prior to my arrival. Focusing on the core businesses of bananas and salads is the correct strategy for the company at this time," he said in the release.
"We continue to believe the long term operating income margin targets we presented earlier this year are achievable in the next 24 to 36 months, and we are already seeing improved results from the new strategy.
"We have seen important customer wins in both bananas and salads, and most of the restructuring activities are already complete."
The executive said while certain fundamentals suggested banana supply and demand was becoming balanced with rising prices, there were still difficult price comparisons tp 2011, with euro exchange rates impacting income by US$10 million.
"In salads, our retail volume reductions as compared to the year ago periods have narrowed since the beginning of the year, and we believe that our entry into private label and additional salad products will further improve our results in 2013."
Outlook for 2013
A Chiquita release said a tightening of banana supply out of Latin America would likely continue and support pricing, while recent contracts should equate to high single digit volume growth for the fruit in North America during 2013.
It said some of that volume was already benefiting results in the fourth quarter, while private label contracts would help retail salad volumes next year as well.
The business expects annual savings of at least US$60 million from the restructuring, which will be partly offset by increasing costs in the core business.
"The consolidation of the Midwest facilities near Chicago will be completed and the company will begin to see operating cost savings from this project toward the end of 2013," the release said.