A renewed focus on banana and salad business helped Chiquita Brands International Inc. to better financial results in 2013.
Charlotte, N.C.-based Chiquita still lost money in the fourth quarter of 2013 and in the year as a whole, but losses were far less than in 2012, according to financial results announced Feb. 27.
Chiquita reported a net loss of $16 million in 2013, down from a $405 million loss in 2012. The company’s operating income was $50 million, up from a $254 million income loss the year before.
In the fourth quarter of 2013, Chiquita lost $31 million, down from a $333 million loss in the fourth quarter of 2012. The operating loss in the quarter was $17 million, down from $205 million in the fourth quarter of 2012.
Chiquita’s improved performance in 2013 was due largely to an emphasis on its banana and salad categories, Ed Lonergan, the company’s president and chief executive officer, said in a news release.
“Chiquita’s improved results in 2013 reflect our decision to return our focus to the core businesses, and the first full year of execution,” Lonergan said in the release. “Throughout the year and into the fourth quarter, we grew sales volume in both our North American banana business and our retail packaged salad business, and we continued to leverage our premium brand in the European banana market.”
Operating income in Chiquita’s banana category was $112 million in 2013, up from $77 million in 2012, due largely to lower logistics costs. Chiquita also enjoyed higher banana sales volumes in North America and higher local pricing in Europe.
In the fourth quarter, however, Chiquita was hurt by an oversupply of bananas, which lowered prices globally. Only in February was the banana market “moving back toward balance,” Lonergan said.
Sales of Chiquita’s salads and healthy snacks were $967 million in 2013, up from $953 million in 2012. The category’s operating loss was $8 million, an improvement on a $218 million loss in 2012.
Hurting the category’s financial performance in 2013 was construction of Chiquita’s new salad production facility in Illinois, which cost about $18 million. The facility consolidates three salad plants and a distribution center. Also, poor growing weather raised the prices of raw products for salads.
In the fourth quarter, Chiquita experienced iceberg supply shortages.