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Fresh Del Monte Produce Inc. reports second quarter 2020 financial results

Lockdowns and global disruptions lead to lower sales for Fresh Del Monte Produce

Fresh Del Monte Produce Inc. reported financial results for the second quarter ended June 26, 2020. 

“As a result of significant global disruptions, including lockdowns, closures and quarantines due to the COVID-19 pandemic, Fresh Del Monte Produce went through an unprecedented, turbulent period during the quarter,” said Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer. “Even with these challenges and the nature of our perishable business, we remained focused on protecting the health and safety of our global team members, and we maintained our business continuity. Our liquidity and ability to generate positive cash-flows remained strong during the quarter. Our transformation is expected to continue in the quarters ahead as we look to improve our asset utilization around the globe, create efficiencies in our operations and position our Company to deliver stronger long-term performance.”

Net sales for the second quarter of 2020 were $1,092.3 million, compared with $1,239.4 million in the second quarter of 2019. The decrease in net sales of $147.1 million was attributable to lower net sales in all of the Company's business segments. The COVID-19 pandemic impacted net sales during the second quarter by an estimated $132.0 million, in its fresh and value-added products and banana segments, as compared to the Company's original expectations for these segments which were developed prior to the pandemic.

Gross profit for the second quarter of 2020 was $78.7 million, compared with $97.6 million in the second quarter of 2019. Adjusted gross profit in the second quarter of 2020 was $89.3 million, compared with $98.2 million in the second quarter of 2019. The decrease in gross profit was principally due to lower gross profit in the Company's fresh and value-added products segment, partially offset by higher gross profit in the Company's banana segment. Gross profit was also impacted by incremental costs, mainly related to other product-related charges of $10.6 million, primarily as a result of reduced demand in the Company's foodservice business and shifting demand at retail, as a result of government imposed mandatory restrictions and social distancing initiatives associated with the COVID-19 pandemic, and volatile supply and demand conditions, along with higher ocean freight costs, partially offset by lower production and procurement costs.

Operating income for the second quarter of 2020 was $33.1 million, compared with operating income of $57.2 million in the second quarter of 2019. Adjusted operating income was $43.7 million in the second quarter of 2020, compared with adjusted operating income of $52.9 million in the second quarter of 2019. The decrease in operating income was due to lower gross profit, lower gains on disposal of property, plant and equipment, net, and higher asset impairment and other charges (credits), net.

Net income attributable to Fresh Del Monte Produce Inc. for the second quarter of 2020 was $17.9 million, compared with net income attributable to Fresh Del Monte Produce Inc. of $38.1 million in the second quarter of 2019. Adjusted net income was $25.7 million in the second quarter of 2020, compared with adjusted net income of $35.0 million in the second quarter of 2019. The decrease was primarily the result of lower operating income and the decrease in other (expense) income net, partially offset by lower provision for income taxes.

More disclosures related to the COVID-19 pandemic are available in the Company's Securities and Exchange Commission filings.

For the full press release, including all the financial tables, click here.


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