Fresh Del Monte Produce Inc. had a “year of contrast” in 2013, reporting an increase in net sales at $3.7 billion but a net loss for the year of almost $40 million.
“While we did not accomplish all of our financial goals, we realized an 8% increase in net sales for the year and a 30% increase for the fourth quarter,” chairman and chief executive officer Mohammad Abu-Ghazaleh said during a conference call Feb. 18.
“However, we faced a number of challenges in the fourth quarter and that hindered our financial performance with increased ocean freight and fruit costs being the heaviest factors.”
The CEO said he was optimistic the company’s efforts with non-retail channels for North American banana sales and overall sales of fresh-cut products would help over the long term. He said the company is becoming more vertically integrated with bananas by decreasing third-party grower contracts, which account for about 40% of its bananas now.
“We have found new avenues for selling and marketing our bananas really through different channels, and not just being focused on retail,” said Abu-Ghazaleh during the call. “This has helped us over the last couple of years in expanding our banana supplies and volumes into the U.S. market.”
He also said Fresh Del Monte is growing its prepared foods business, but has a focus on fresh-cut products. He said the company is open to acquiring operations in the fresh-prepared sector.
According to senior vice president Richard Contreras, fourth-quarter statistics include:
- Banana net sales increased $65 million to $427 million. Volume was 15% higher. Worldwide pricing increased 2% or 28 cents per box to $13.70 per box.
- Other fresh produce net sales increased $26 million to $360 million.
- Gold pineapple net sales were $140 million, compared with $127 million in the fourth quarter 2012. Volume increased 9%.
- Fresh-cut net sales decreased 4% to $87 million. Volume decreased 4%, and unit cost was 4% higher.
- Melon net sales decreased to $20 million. Volume decreased 23%, and unit pricing was 12% higher.
- Non-tropical net sales increased 23% to $62 million. Volume increased 25% and unit pricing decreased 1%.
- Tomato net sales increased 19% to $18 million. Volume increased 14% and pricing was 4% higher. The company expects to start seeing sales from Florida/Virginia tomato operations — bought at auction from East Coast Brokers and Packers Inc. — in the second quarter.