Fresh Del Monte Produce Inc. has reported the financial results for the first quarter ended April 1, 2022.
"During the first quarter, our net sales increased by $49 million compared with the prior-year period – a direct benefit of leading the industry in the implementation of inflation-justified pricing actions. However, our cost of product sold increased by $64 million due to across-the-board inflationary pressures, resulting in lower operating income," said Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer. "We remained focused on driving incremental operating leverage through product innovation, cost management, and operational efficiencies as reflected in the significant growth in our third-party freight services."
"We made progress on our strategic initiatives effectively managing the business for the long-term despite incremental deterioration of already unprecedented supply chain constraints and higher inflation compounded by the war in Ukraine."
Abu-Ghazaleh added, "In keeping with our shareholder value accretion approach, our capital deployment in the first quarter concentrated on operational investments in data-driven technology and smart farming, a strategic investment, and on paying a higher dividend."
Net sales for the first quarter of 2022 increased by $48.6 million, or approximately 5%, compared with the prior-year period. Net sales benefited from inflation-justified pricing actions implemented in the fourth quarter of 2021. Conversely, sales were negatively impacted by fluctuations in exchange rates mainly versus the euro and Japanese yen compared with the prior-year period. Importantly, lack of availability of third-party shipping capacity on certain shipping routes, substantially limited the sales of various products.
Gross profit for the first quarter of 2022 was $89.8 million compared with $105.0 million in the prior-year period. Despite higher net sales, gross profit was negatively impacted by worsening inflationary and other cost pressures compared to the prior-year period. Higher cost across-the-board including packaging materials, fertilizers, ocean and inland freight, fuel and labor offset higher net sales. Additionally, fluctuations in exchange rates were also unfavorable.
Operating income for the first quarter of 2022 was $39.8 million compared with $59.7 million in the prior-year period, and Adjusted operating income(3) was $40.4 million compared with $57.7 million in the prior-year period. The decrease in operating income was primarily due to lower gross profit and the net impact of disposal of property, plant and equipment, partially offset by lower administrative expenses.
FDP net income(1) for the first quarter was $25.8 million compared with $42.7 million in the prior-year period and Adjusted FDP net income(3) was $26.2 million compared with $41.6 million in the prior-year period.
For more information:
Fresh Del Monte Produce Inc.
Tel.: +1 305-520-8433