Chiquita Brands South Pacific Ltd's posts fall in net profit

Chiquita Brands South Pacific Ltd's underlying first half earnings rose despite Cyclone Larry affecting its banana sales, although one-off costs helped drag down its bottom-line net profit.

The fresh food grower on Monday reported a 19 per cent decline in net profit to $5.69 million for the six months to December 31.

Earnings before interest, biological assets and tax increased by 22 per cent to $15 million, which Chiquita said was an encouraging result in view of the challenges it faced after Cyclone Larry.

After taking into account significant items and a decrease in its biological assets due to a seasonal reduction in berry and citrus assets, Chiquita's earnings before interest and tax (EBIT) fell 9.9 per cent to $11 million.

The company incurred $1.7 million in significant items at the operating profit before tax line. This included $1.4 million in costs to defend the Tradefresh takeover bid.

Chiquita said it still expected to meet its forecasts for the year at the EBIT and earnings before interest, tax, depreciation and amortisation (EBITDA) levels - although costs would effect its bottom-line result.

"The EBITDA and EBIT outlook (before significant items) remains in line with previous forecasts issued to the market.

"However, given the significant unforeseen costs that have arisen in the first half of $2.3 million, the previously reported net profit after tax of $10 million is not expected to be achieved," it said.

Chiquita's net profit fell 68 per cent to $3.38 million in 2005/06, after Cyclone Larry almost destroyed all its banana crops when it hit Far North Queensland last March.

Chiquita, whose largest shareholder is Tradefresh (now known as Costa Exchange Holdings Ltd) with an 80.75 per cent stake following the $110 million takeover bid, has forecast EBIT of about $20 million for the 2006/07 year.

Chiquita said Blueberry operations had been positive to now and raspberries had a strong start to the season, while its mushroom business had performed in line with expectations but severe frosts had adversely affected its Yandilla Park farm management business.

Source: theage.com.au