Fresh Del Monte Produce has posted an 11% increase in sales, to $1.27 billion, in the second quarter of 2018, driven by strong growth in avocado sales.
Net sales of avocados rose by 11%, to $95 million, compared to the previous year, with volume rising by 43% and pricing declining by 22%. Sales were also boosted by the acquisition of Mann Packaging, a North American-based grower, in February, the company said.
However, the group said that net sales in its banana division were down to $458 million, from $499.5 million last year, with volume down 6% on the previous year.
Gold-pineapple sales were up 3%, sales of fresh-cut products rose by 61% (largely due to the Mann Packaging acquisition), and non-tropical produce increased sales by 10%.
Gross Profit Decline
Overall, Fresh Del Monte Produce reported gross profit of $78.3 million for the second quarter, compared to $123.2 million in the second quarter of 2017.
It said that this decrease was due to lower gross profit across its various business segments, as well as lower selling prices in bananas and other fresh-produce business segments, as well as a negative impact from transportation and production costs.
Acquisition Boost
“The quarter was highlighted by our recent acquisition of [the] Mann Packing Company, and by strong sales growth, despite reductions in pricing across many of our products,” Mohammad Abu-Ghazaleh, chairman and chief executive officer, commented on the results.
“Uncontrollable factors, led by congestion, delays and inclement weather at our loading ports in Central America, substantially lower banana selling prices in Europe, an oversupply of pineapples in North America, continued tightening of the transportation market, and higher commodity costs, adversely affected our overall performance,” Abu-Ghazaleh added.
"Looking ahead, we remain firmly focused and committed to investing in and further diversifying our global operations while driving profitable growth over the long term,” he continued.
Fresh Del Monte Produce saw its selling, general and administrative expenses grow to $49.9 million last year, compared with $41.9 million in the second quarter of 2017, largely due to costs associated with the acquisition of Mann Packaging.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
