Fresh Del Monte posts Q3 loss amid ongoing operational challenges
U.S.-based Fresh Del Monte Produce has reported a net loss for the third quarter of US$21.5 million, as the company continues to face some operational challenges from earlier in the year.
The result compared to net income of US$11.5 million recorded in the third quarter of 2017.
The change was primarily the result of lower operating income and higher interest expense, partially offset by lower provision for income taxes, the company said.
"We delivered a 12% increase in net sales during the third quarter, led by a solid contribution from our recent acquisition of Mann Packing," said chairman and CEO Mohammad Abu-Ghazaleh.
"Our operations continue to recover from previously disclosed challenges earlier in the year. We benefited from the progress of our diversification strategy, innovation efforts, and global presence while keenly focusing on creating greater efficiencies throughout our organization."
Operating loss for the third quarter was US$11.3 million, compared with operating income of US$16.7 million in the third quarter of last year. The decrease was primarily due to higher asset impairment and other charges, and higher selling, general and administrative expenses as a result of the acquisition of Mann Packing.
Net sales for the quarter ended ending Sept. 28 rose to US$1,069 million. Del Monte said this was due to increased sales on its other fresh produce and prepared food business segments, primarily due to contributions from the Mann Packing business, partially offset by lower net sales in the banana business segment.
Gross profit fell by 10% to US$52.6 million, which was attributed to lower gross profit in the other fresh produce business segment and higher ocean freight and production costs, but partially offset by higher banana prices and favorable exchange rates.
Del Monte acquired Mann Packing in February. In June the company recalled some vegetable trays following reports of illnesses.