Bad weather conditions mean Q1 GAAP net loss for Chiquita

Chiquita Brands International, Inc. has released financial and operating results for the first quarter 2014. The company reported GAAP net loss of $25 million in 2014 compared to GAAP net income of $2 million 2013. GAAP operating income for 2014 was $1 million compared to income of $25 million in 2013. The company also reported comparable operating income[1] of $7 million for 2014 compared to comparable operating income of $23 million for 2013.

"While we are confident in our 2014 progress toward our long term financial targets and benefits from our 'return to the core' strategic plan, our first quarter results did not meet expectations," said Ed Lonergan, Chiquita's president and chief executive officer. "Drought conditions in Central America and winter storms in North America and over the Atlantic disrupted our value chain and market demand for our products. While we grew our North American banana volume in excess of 5 percent compared to first quarter of 2013, shortfalls in contracted and owned farm supply required purchase of expensive weekly market fruit to serve our contracted business and resulted in inefficient shipping choices and short supply to our weekly market customers across countries. In salads and healthy snacks, winter weather resulted in mismatched demand versus supply in both our retail and foodservice businesses, impacting service and raw product requirements. While retail salad volume grew 5 percent compared to first quarter of 2013, our foodservice and fruit ingredient businesses volumes were substantially lower year on year due to a number of factors."

Lonergan continued, "While weather impacts are a fact in our industry, our responsibility as leaders is to mitigate these risks. In addition to bringing together two complementary businesses, we believe that the combination with Fyffes, which we announced on March 10, 2014, will fundamentally improve our ability to deal with weather risks and event-driven supply volatility in our bananas business due to the broader growing and shipping profiles of the combined entities. Last week, ChiquitaFyffes filed a registration statement with the SEC in connection with the proposed combination, and we have begun the regulatory review process in both North America and Europe. We plan to close the transaction by the end of the year and remain excited about the opportunities for the combined business. Also last week, we began implementation of efficiency and pricing actions in our salads business, supporting our long term profitability objectives for this business."

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