Fresh Del Monte suffers profit decline in Q3

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Fresh Del Monte suffers profit decline in Q3

Fresh Del Monte's third quarter results showed a notable decline in the company's earnings. Gross profit dropped almost 30%, down to US$53 million.

The company's lower gross profit was slated as the cause of a 74% decline in operating income, which dropped to US$7.4 million for the quarter.

Net sales, however, enjoyed a 9% bump up to US$861.1 million due in part to higher pricing for bananas and other fresh produce.

CEO Mohammad Abu-Ghazaleh took a positive spin on what he described as the company's most challenging quarter of the year.

"We experienced growth in all major markets as we strove to capitalize on our position as a leader in the global produce industry. However, our progress was limited by an industry-wide oversupply of bananas, increases in logistic and fruit costs, as well as unfavorable year-over-year exchange rates," Abu-Ghazaleh said in a release.

"We remain committed to our strategy of extending our reach into value-added products and distribution channels that bring our convenient and healthy products closer to consumers and seeking attractive opportunities in emerging markets that we view as engines of growth. We are well positioned and our focus remains on steady growth and profitability."

Net banana sales for the quarter enjoyed a 12% increase to US$402.3 million. Gross profit, however, took a sharp drop of almost 90%, down to US$1.3 million.

Other fresh produce, including tomatoes, melons, non-tropical fruits and fresh-cut product lines, experienced a similar situation. Net sales increased 9% to US$366.1 million, while gross profit dropped 19% to US$41.0 million.

Net sales for prepared foods dropped 1% to US$92.7 million, accompanied by a 7.8% drop in gross profit, totaling US$11.6 million.

The company's overall debt improved, dropping from US126.2 million to US$99.7 million.

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