Sparking a jump in its stock price, Dole plc on May 18 reported first quarter 2023 gains in revenue and earnings.
The company reported revenues of $2 billion in the quarter, a gain of 1% compared with a year ago. First quarter Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) totaled $100.4 million, an increase of 9.3%.
Dole plc announced in January 2023 an agreement to sell its fresh vegetables division to Fresh Express for gross proceeds of approximately $293 million, and the company is continuing to work through the regulatory process for that sale, Carl McCann, executive chairman, said in a news release.
After the first quarter results were released on May 18, the Dole (DOLE) stock was trading 8.5% higher than the previous day’s close at noon Central time on the New York Stock Exchange.
“We are pleased to have started the year strongly and to have delivered Adjusted EBITDA growth in the first quarter,” McCann said in the release. “We believe the group is well-positioned for growth and continue to target Adjusted EBITDA of $350 million for the full year.”
Improvements
Dole’s revenue increased 1%, or $18.9 million, primarily due to strong performance in the Fresh Fruit and Diversified Europe Middle East and Africa segments, offset partially by the Diversified Americas segment, the release said.
Adjusted EBITDA increased 9.3% in the first quarter, or $8.5 million, primarily driven by strong fresh fruit performance, offset partially by headwinds in the Diversified Americas segment.
Revenue for the fresh fruit business unit increased 6.5%, or $49.1 million, the release said. Revenue was positively impacted by higher worldwide pricing of bananas and pineapples, as well as worldwide increases in volumes of bananas sold, partially offset by lower volumes of pineapples sold, the release said.
Revenues from its Diversified Fresh Produce unit decreased 8.8%, or $40.9 million, primarily driven by timing differences for the Chilean cherry season, as well as a challenging quarter for berries and grapes, partially offset by continued strong performance in potatoes and onions in North America, according to the release.
In the earnings report, Dole said that in February 2023, the company experienced a cybersecurity incident identified as ransomware.
“Upon detecting the attack, the company promptly took steps to investigate and contain the threat, retaining the services of leading third-party cybersecurity experts and working with law enforcement,” the release said. “The incident had a limited impact on our operations overall, however it was disruptive for our Fresh Vegetables and Chilean businesses in particular. Direct costs related to the incident were $10.5 million of which $4.8 million related to continuing operations.”
The company identified challenges and opportunities for the rest of 2023.
“We see signs of improved logistical efficiencies in several areas, which is helping to bring more stability after a period of severe supply chain disruption,” the company said in the release. “We have also seen some unusual weather events, and as we progress through the second quarter, we are closely monitoring the impact of unprecedented rains this year in California, which continue to impact the vegetable and berry crops in that region.”
Some positives in the outlook, the company said, include the strengthening Euro relative to the U.S. dollar, more stable fuel prices and continued signs of inflation moderating in certain areas. However, the company said areas of concern include high interest rates and unusual currency movements.
