Operating income for Fresh Del Monte Produce Inc. was almost 74% less in the third quarter this year compared to 2012, but company officials said they are pleased with top line growth and plan to continue to diversify, pointing to recently acquired tomato property in Florida that should be producing by early 2014.
Chairman and chief executive officer of the Coral Gables, Fla.-based company, Mohammad Abu-Ghazaleh, said during a conference call Oct. 29 that Fresh Del Monte would begin planting tomatoes in some of the Florida fields “soon,” referring to U.S. tomatoes as a “local” product.
“We are overdue to grow our own products in North America,” the chairman said, adding that the acquisition of 3,300 acres in Florida and 2,500 in Virginia from East Coast Brokers and Packers Inc. would enable Fresh Del Monte to have a 12-month tomato supply. He said the land would be planted in phases, but did not say how much would be in production by January 2014.
The third-quarter income drop is a result of higher costs, especially related to bananas, even though banana sales increased 12% compared to the third quarter of 2012, officials said.
The company’s balance sheet showed banana sales, which made up 47% of revenue, increased to $402.3 million from $359.8 million in 2012’s third quarter. But, gross profit shrank to $1.3 million from $12 million in the third quarter of 2012 because unit costs rose 12%. Banana volume was up 3% and worldwide pricing grew 8%.
Fresh Del Monte reported sales of other fresh produce increased 9% to $366.1 million this year during the third quarter. Prepared-food sales were down 1% to $92.7 million.
For other fresh commodities, the company reported that:
- Gold pineapple net sales decreased 7% to $114.9 million. Volume decreased 10%. Pricing increased 3%. Unit cost was 3% higher;
- Fresh-cut net sales increased 7% to $105.5 million. Volume increased 8%. Pricing was in line with the prior year period. Unit cost was 5% higher;
- Melon net sales increased 37% to $9.8 million. Volume increased 4%. Pricing increased 32%. Unit cost was 20% higher;
- Non-tropical net sales increased 35% to $81.5 million. Volume increased 25%. Pricing increased 7%. Unit cost was 17% higher; and
- Tomato net sales increased 39% to $22.1 million. Volume increased 20%. Pricing increased 16%. Unit cost was 14% higher.