Higher banana prices help boost Del Monte's Q1 profits
Del Monte Fresh Produce has reported a 7% year-on-year increase in its gross income during the first quarter thanks in part to higher banana prices in all its markets.
Gross profit for the period ended March 30 rose to US$106.5 million, while net sales grew by 7% to US$1.1 billion.
The increase in profit was also helped by favorable exchange rates in Europe and Asia, but partially offset by higher fruit procurement and distribution costs.
The boost to net sales, meanwhile, was attributed to higher sales in the 'other fresh produce' and banana business segments, partially offset by lower sales in the prepared food business segment.
Despite the rises in gross profit and net sales, Del Monte's net income fell by 11% to US$41.5 million. The company said the drop was primarily due to higher interest expense, net and foreign exchange losses, partially offset by higher operating income and lower provision for income taxes.
Chairman and CEO Mohammad Abu-Ghazaleh said that the acquisition of Mann Packing earlier this year "already contributed robust one-month sales growth and profitability in the value-added product line without the implementation of any synergies."
"Our avocado product line also showed strong results. These are two good examples of our continued commitment to executing our diversification strategy," he said.
"However, we did face a series of external headwinds brought on by unfavorable weather and logistical challenges that hindered our progress.
"We remain resolute and enthusiastic about future opportunities, especially in our value-added products, with several exciting new direct to consumer ventures and innovative products to emerge during the coming months to further drive diversification."