Fresh Del Monte Produce Inc. has reported financial results for the second quarter ended June 28, 2024.
"We are pleased to see our growth strategy and company focus yielding positive results, in the fresh and value-added products segment, where we achieved strong margin improvement during the second quarter of 2024. We see pineapple, fresh-cut fruit, avocados, and value-added products as core strengths—with consumers appreciating the innovation, convenience, and taste," said Fresh Del Monte Chairman and CEO Mohammad Abu-Ghazaleh.
Financial highlights for the second quarter 2024
Net sales for the second quarter of 2024 were $1,139.7 million, compared with $1,180.5 million in the prior-year period. The decrease in net sales was primarily due to lower banana net sales, driven by lower sales volume and lower per unit selling prices for bananas. The decrease was partially offset by an increase in net sales in the fresh and value-added products segment driven by higher per unit selling prices.
Gross profit for the second quarter of 2024 was $113.2 million, compared with $116.8 million in the prior-year period. The decrease in gross profit was primarily due to lower net sales, higher per unit production and procurement costs, which were partly driven by the negative impact of increased weather-related events, mainly high temperatures and low rainfall, in production areas in Central America and the Philippines, as well as the negative impact of fluctuations in exchange rates partially offset by lower ocean freight costs and higher per unit selling prices in the fresh and value-added products segment.
Gross profit in the second quarter of 2024 included $1.2 million of other product-related charges, primarily due to $0.5 million for shipment disruptions in the Red Sea and $0.5 million in additional clean-up costs associated with the flooding of a seasonal production facility in Greece during the third quarter of 2023. There were no product-related charges during the second quarter of 2023. Gross margin for the second quarter of 2024 was 9.9%, in line with the prior-year period. Excluding the net impact from the other product-related charges, Adjusted gross profit (1) for the second quarter of 2024 was $114.4 million compared with $116.8 million in the prior-year period.
Operating income for the second quarter of 2024 was $68.2 million compared with $72.1 million in the prior-year period. The decrease in operating income was primarily due to lower gross profit and a higher gain on the sale of assets in the prior-year period. The decrease was partially offset by asset impairment and other charges in the prior-year period compared with a credit for insurance proceeds in the current year. Adjusted operating income (1) was $64.5 million compared with $67.9 million in the prior-year period. Adjusted operating income for the second quarter of 2024 excludes the $1.2 million of other product-related charges mentioned above, a $3.4 million gain on asset sale of a European warehouse and $2.0 million of insurance recoveries associated with fire damage for a facility in South America during the fourth quarter of 2023. In the prior-year period, Adjusted operating income excluded the gain on sale of $8.8 million primarily related to the sale of the Company's plastics business and other underutilized assets in South and Central America, $4.6 million of asset impairment and other charges related to impairments of grape vines in South America due to low productivity, idle land in Central America, and expenses incurred in connection with a cybersecurity incident in the first quarter of 2023.
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Other (income) expense, net for the second quarter of 2024 was a gain of $2.3 million, compared with a loss of $6.4 million in the prior-year period. The change was primarily due to an unrealized gain recognized on an unconsolidated company within the food and nutrition sector and foreign currency gains during the current quarter as compared with foreign currency losses in the prior-year period.
FDP net income (2) for the second quarter of 2024 was $53.6 million compared with $47.7 million in the prior-year period, and Adjusted FDP net income (1) was $50.9 million compared with $46.2 million in the prior-year period. Adjusted FDP net income for the second quarter of 2024 excludes the above-mentioned adjustments and the associated $1.0 million tax effect. In the prior-year period, Adjusted FDP net income excludes the above-mentioned adjustments and the associated $2.7 million tax effect.
For more information:
Claudia Pou
Fresh Del Monte Produce Inc.
Email; [email protected]
