COVID-19 pandemic cuts profits for Fresh Del Monte
Fresh Del Monte Produce, Coral Gables, Fla., reported the COVID-19 pandemic dropped expected net sales of fresh, value-added and banana segments in an “unprecedented and turbulent” second quarter by an estimated $132 million.
Higher costs and disruptions in foodservice business contributed to lower profits than a year ago for the second quarter ending June 26.
The company reported gross profit for the second quarter was $78.7 million, down 19% from the second quarter of 2019.
The decrease in gross profit, according to a news release, was mainly because of lower gross profit in the company’s fresh and value-added products segment, partially offset by higher gross profit in the firm’s banana segment.
Fresh Del Monte’s decline in gross profit also reflected reduced demand in foodservice business and shifting demand at retail caused by mandatory restrictions and social distancing measures related to the COVID-19 pandemic, the company said.
“As a result of significant global disruptions, including lockdowns, closures and quarantines due to the COVID-19 pandemic, Fresh Del Monte Produce went through an unprecedented, turbulent period during the quarter,” Mohammad Abu-Ghazaleh, chairman and CEO, said in the release.
“Even with these challenges and the nature of our perishable business, we remained focused on protecting the health and safety of our global team members, and we maintained our business continuity. Our liquidity and ability to generate positive cash-flows remained strong during the quarter.”
Net sales for the second quarter of 2020 were $1.09 billion, down 12% from the second quarter of 2019, according to the release. The decline in net sales of $147.1 million was linked to lower net sales in all business segments.
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