Severe weather conditions in Costa Rica and Guatemala â and higher costs â put a heavy damper on Fresh Del Monteâs first-quarter financial report.
The Coral Gables, Fla.-based company reported April 28 that its profits were down 45% for theÂ quarter that ended March 27. According to the report on the companyâs Web site, excluding asset impairment and other charges, reported earnings per diluted share were 56 cents for the first quarter of 2009, compared to $1.07 in the first quarter of last year.
Â In a new release, Fresh Del Monte chairman and chief executive officer Mohammad Abu-Ghazaleh cited progress in long-term initiatives such as strong growth in the companyâs global banana business, an increase in volume of core products and improvements in the companyâs fresh-cut category.
âWhile we made progress toward our long-term initiatives, our achievements were overshadowed by a number of challenges during the quarter that negatively affected our finanacial performance,â Abu-Ghazaleh said in the release. âThese challenges included severe weather conditions in our banana and gold pineapple production areas in Costa Rica and our banana production areas in Guatemala. These challenges led to disruptions in our operations, a significant decrease in fruit quality, along with higher fruit production and procurement costs.
âWe also experienced a dramatic reduction in our melon category performance, the result of significantly lower melon selling prices, primarily due to an oversupply in the market and the difficult economic environment,â Abu-Ghazaleh said in the release.
In the release, Abu-Ghazaleh also pointed to the strengthening of the U.S. dollar against other currencies as another factor that hampered financial performance.
Fresh Del Monte reported its gross profit for the first quarter was $83.8 million, down 13.5% from $96.9 million the same quarter last year. Net income fell to $35.5 million, down 43.4% from the $62.7 million from a year ago. Total sales for the quarter were $879.7 million, down 2% from the $894.9 million in 2008.
Despite the dismal quarter, Abu-Ghazaleh said he sees better times ahead.
âWe firmly believe many of the challenges we faced in the quarter were temporary and that our long-term prospects remain bright,â he said in the release.