The higher turnover is largely due to the acquisition of Mann Packing, which resulted in greater sales in several segments. "The second quarter has been marked by the recent acquisition of Mann Packing Company and strong sales growth, despite price drops for different products," said CEO Mohammad Abu-Ghazaleh.
Uncontrollable factors, such as delays, congestion and the weather in Central America were reflected in the results. The European market was characterised by lower banana prices; moreover, the company faced a surplus of pineapples in North America.
Thanks to the greater sales of processed products, vegetables and avocados, the turnover of the category "Other products" amounted to 721 million dollars (2017: 568.1 million dollars). The gross profit, however, was lower and stood at 46.9 million dollars (2017: 55 million dollars).
Pineapple sales increased by 3% (to $ 139.4 million) compared to the previous year. This higher turnover, however, is due to a larger volume, which grew by 12% and thus compensated for prices dropping by 8%. Avocados also grew in terms of volume (+43%), but the lower prices (-22%) had a negative impact on the sales growth. Nevertheless, the turnover still increased by 11% reaching 951 million dollars.
As a result of the acquisition of Mann Packing, the turnover from processed products rose by 61% to 272 million dollars. The volume also increased considerably by 96%. Prices were under pressure, however, and recorded an 18% drop compared to the previous year.
As regards non-tropical products and vegetables, both volumes and prices increased. For vegetables, this growth was due to the acquisition of Mann Packing. Consequently, a higher turnover was reported.
In the second quarter of 2018, the turnover generated from bananas fell to 457.8 million dollars (2017: 499.5 million dollars). The volume dropped by 6% and prices were under pressure worldwide. The price fell by $ 0.40 (3%) to $ 14.52 per unit. Gross profit fell from 58.1 million dollars in 2017 to 23.8 million dollars this year.
The acquisition of Mann Packing has also contributed to rising sales for the canned segment. The company achieved sales worth $ 93.6 million, compared to $ 79.5 million a year earlier. That increase is largely attributable to Mann Packing. A decline was recorded in the turnover generated from canned pineapples.
As a result of the lower prices for various products, the gross profit amounted to 78.3 million dollars. That is a sharp fall compared to the 123.2 million dollars recorded a year earlier as gross profit for the second quarter.
Operational income also fell from $ 79.5 million in 2017 to $ 13.8 million this year. Fresh Del Monte recorded a net loss of $ 7.9 million in the second quarter (2017: $ 69.2 million). The comparable net result also shows a sharp fall: 6.9 million in 2018, compared to 71.3 million dollars in the second quarter of 2017.
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