Del Monte posts double-digit operating income growth in 2021
Fresh Del Monte Produce has posted a sharp uptick in year-on-year net income in 2021, despite myriad challenges and net sales just rising by 1 percent.
Net income for the full fiscal year 2021 was US$80 million compared with $49.2 million in 2020, while net sales inched upwards to US$4.3 billion.
For the full fiscal year, adjusted EBITDA was US$206.8 million compared with $189.4 million in the prior-year period.
“In 2021 we posted robust double-digit operating income growth compared with 2020. We demonstrated agility and industry leadership in navigating the current challenging macroeconomic environment as we focused on mitigating industry-wide supply and labor headwinds,” said Mohammad Abu-Ghazaleh, Chairman and CEO.
"We implemented inflation-justified price increases toward the end of the year, made investments targeted at automation, and focused relentlessly on productivity.
"As we move forward, I am confident in our team's ability to execute our long-term strategy of growing our core business, increasing the reach of higher-margin value-added categories, implementing and leveraging technology solutions as we evolve into an Agritech company, and expanding our customer and brand partnerships throughout our global operations."
For the full fiscal year, gross profit was US$303.8 million compared with $250.9 million in the prior-year period.
In the first half of 2021, despite inflationary and other cost pressures, gross profit benefited from strong performance across all Del Monte's segments, the company said.
The increase was driven by improved demand on key product categories related to relaxed restrictions on social gatherings in some of our main markets while the banana segment realized higher per unit selling prices compared with the first half of 2020.
The higher banana pricing helped offset incremental production and procurement costs following the hurricanes in Central America in the fourth quarter of 2020.
Throughout the year, gross profit was also positively impacted by fluctuations in exchange rates and by $33.6 million of other product-related charges in the prior-year period mainly comprised of inventory write-downs, net of insurance recoveries, resulting from damage caused by hurricanes in Central America and write-downs due to supply and demand disruptions caused by the Covid-19 pandemic.
The increase was partially offset by inflationary and other cost pressures, which intensified in the second half of 2021, negatively impacting gross profit.