(UPDATED COVERAGE, March 14) The sale of Dole Food Co. Inc.'s worldwide packaged foods and Asia fresh businesses on April 1 this year to Japan’s ITOCHU Corporation will substantially shrink the scope of the Westlake Village, Calif.-based company.
In financial results released March 12, Dole said the combined revenue of Dole’s discontinued operations represented $2.6 billion, or 38% of Dole’s revenues in 2012.
“The new Dole will continue as an international commodity produce company with a smaller footprint, retaining its entire North American fresh vegetables business as well as its fresh fruit businesses in North America, Latin America, Europe and Africa, which together generated $4.2 billion in revenues in fiscal 2012 and adjusted earnings before interest, tax and depreciation from continuing operations of $146 million,” Michael Carter, Dole’s president and chief operating officer, said in a news rleease.
Carter said fiscal 2012 results for all of Dole’s operations were lower compared to 2011 largely because of banana market conditions and non-recurring charges for ITOCHU transaction related costs, provisions for certain previously-disclosed legal-related matters, and charges related to Typhoon Bopha in Asia.
Dole said results for the fourth quarter of 2012 totaled a loss of $52 million, compared with income of $4 million income in the fourth quarter of 2011. Comparable income from continuing operations for fiscal 2012 was $44 million, compared to $122 million in 2011.
Dole said its revenues for all of 2012 decreased 11% to $4.2 billion, primarily because of diversitures of fresh fruit businesses in Spain and Germany. The sale of those businesses accounted for $539 million of the year’s sales decline, according to the release.
Aside from the sales of those companies, Dole’s fresh fruit revenues fell 2% as a result of lower prices in North America for bananas and an unfavorable currency movements in Europe, according to the release. Partially offsetting those declines, Dole noted improved pricing of fresh fruit from Chile and higher volumes of fresh pineapples sold.
Fresh vegetable revenues surged 8%, linked to improved prices for packaged salads and sales from the October 2011 purchase of SunnyRidge Farm, which the release said added $68 million in sales during 2012. While fresh-packed vegetables saw lower pricing, overall fresh vegetable revenues (excluding the SunnyRidge acquisition) grew 3%, according to the release said.