Higher banana prices spur better returns for Fresh Del Monte
Higher per-unit banana selling prices in 2021 helped Coral Gables, Fla.-based Fresh Del Monte Produce Inc., increase annual profits compared with 2020.
For the fiscal year ending Dec. 31, the company reported its gross profit was $303.8 million, up from $250.9 million in the prior-year period.
The higher banana pricing helped offset an increase in incremental production and procurement costs following the hurricanes in Central America in the fourth quarter of 2020, according to a news release.
Net banana sales for all of 2021 decreased by $21.5 million, or 1%, primarily because of lower sales volume in North America, according to the release.
Gross banana-related profit for full fiscal year 2021 increased $25.3 million, or 30%, the company reported. That was mostly because of the company’s performance in North America and Europe, according to the release.
“In both regions, the increase was driven by higher per-unit sales prices, partially offset by higher per-unit production and distribution costs impacted by inflationary and other cost pressures,” the company said in the release. “Additionally, gross profit in 2020 included $8 million of other product-related charges attributable to our banana segment, comprised of write-offs, net of insurance recoveries, resulting from damages caused by hurricanes in Central America in the fourth quarter of 2020, and inventory write-offs related to supply and demand disruptions caused by the COVID-19 pandemic.”
For the full fiscal year, the release said, the company’s adjusted gross profit in the banana segment was $109.7 million compared with $93.6 million in the prior-year period.
