CEO says Chiquita will bounce back from $254 million loss - The Packer

CEO says Chiquita will bounce back from $254 million loss

03/12/2013 08:32:00 AM
Mike Hornick

Chiquita Brands International expects to begin its rebound from a $254 million operating loss in 2012 by increasing U.S. market share in bananas with new contracts and benefiting from supply levels that seem likely to balance demand through June.

Chiquita is also getting a boost from new retail private label salad business that began shipments in the first quarter. The company estimates volume at 1.6 million cases for 2013.

“We remain focused on our core businesses of bananas and salads, and recent successes in both areas will add profitable volume in the coming year,” Ed Lonergan, president and chief executive office, said in a news release.

Chiquita released quarterly and year-end results March 11, confirming a January projection of an operating loss between $236 million and $281 million for 2012. That’s down from $34 million in income the prior year.

Fourth quarter operating losses were $205 million, down from a $12 million loss the year before. Chiquita had forecast a drop between $188 million and $233 million.

Net sales were $3.1 billion in 2012, roughly equal to 2011. Fourth quarter sales were $738 million, down from $722 million.

Net sales of salads and healthy snacks remained consistent year-on-year at about $953 million. Foodservice and healthy snack sales offset lower sales of retail value-added salads, according to the release. An operating loss of $4 million in the segment – compared to $8 million in operating income the prior year – was attributed to volume losses related to the Fresh Express brand-oriented retail salad strategy and higher production costs.

The company has a two- to three-year goal of increasing operating margins in salads by 7% to 8% and in bananas by 4%. Chiquita was already expanding its salad program in 2012, including private label and organic salads plus head lettuce.

The impact of euro exchange rates and lower retail salad results made it difficult to compare the quarterly and yearly results with past numbers, according to Lonergan.

“We also have experienced higher local banana pricing in Europe as a result of a relatively balanced banana market and have benefited from savings associated with our value chain and corporate restructurings,” he said in the release.



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