Del Monte Produce falls short of Q4 expectations, strong overall for 2019
Fresh Del Monte Produce reported losses in the last quarter of 2019 as revenue declined 2% from last quarter, but, overall, had a more successful year than last. Ending its fiscal year on Dec. 27, 2019, it revealed its fourth quarter results this Wednesday.
These updated financial results come after the company's strong net sales in its third quarter. In Q4, its fresh and value-added product sales dropped 3.3% to US$597.2 million due to lower sales volume in the company's fresh-cut vegetables product line. Additionally, Del Monte's Mann Packing subsidiary had a recall in Nov. 2019 that impacted sales.
On the other hand, its banana division of sales increased by 1% to US$398.7 million as a result of favorable pricing in Europe and higher sales volumes in the Middle East.
While the its final quarter brought slightly unexpected downturns, it still performed well throughout the year. The company said it made US$300.6 million in 2019 as compared to US$279.8 million the previous fiscal year.
The uptick in overall profit for the year was driven by these higher selling prices for bananas and its fresh business markets. For 2019, operating income and net income were also higher than they were in 2018.
"While we are encouraged by these results, we believe our transformation process will continue as we drive innovation and growth in our value-added businesses and leverage our core products to drive consistent revenue and earnings growth for the long-term," said chief executive officer Mohammad Abu-Ghazaleh in the release.
The company's board of directors also announced that its cash dividends similarly shot up for this year, reaching ten cents (US$0.10) per share.
Another standout for Del Monte this year was the success of its avocado product line, likely due to the fact that the company shifted production units and strengthened efforts in 2018.
“In 2019, we benefited from our 2018 initiatives to realign certain production units, as well as early returns on our 2019
strategic shift to focus on becoming a value-added and more diversified Company," explained Abu-Ghazaleh.