April 30, 2020
Mohammad Abu-Ghazaleh, chairman and CEO of Fresh Produce Del Monte
Fresh Del Monte Produce has said its sales growth and net revenue slides as the whirlwind of coronavirus blows company off course in first quarter of the FY 2020. The company is battling against the global impact of the coronavirus pandemic that has hit the economy severely.
The group informed that net sales slipped from US$1.154bn in the opening quarter of 2019 to US$1.118bn this year, overall business segments experiencing lower sales volume.
Del Monte revealed that the outbreak of coronavirus has impacted net sales by approximately US$27m in its fresh and value-added and banana business segments.
Ultimately, net income attributable to Del Monte for Q1 2020 was US$13m, falling from US$36.1m in the previous year, primarily the result of lower operating income and the decrease in other income, net, partially offset by lower provision for income taxes.
“We were challenged across our global operations during the first quarter of 2020 as we navigated through the headwinds created by the Covid-19 pandemic,” said Mohammad Abu-Ghazaleh, chairman and CEO. “Beginning in January in Asia and ramping up in March, our sales were impacted across all of our markets.
“However, the company’s global presence in the retail fresh produce industry, the diversity of our product portfolio and the efficiency and flexibility of our operations enabled us to quickly adapt to the Covid-19 pandemic,” he added. “Near-term demand in our foodservice distribution channel, net sales of higher price point products such as pineapples, avocados and fresh-cut fruit and vegetables remain challenging, but we remain committed to serving our customers without interruption.
“In terms of liquidity, we believe our cash on hand, availability under our credit facility and cash flows from operations will be sufficient to manage our operations.”
Speaking about the banana segment, the sales fell to US$427m from US$ 431.5m in the same quarter of 2019, mainly due to lower sales in Asia, Europe and North America, partially balanced by higher sales in the Middle East.
Considering the bananas, Del Monte estimated that the deadly pandemic has impacted net sales by an estimated US$6m.
Del Monte’s fresh and value-added segment, sales dropped to US$660.9m from US$690m, with coronavirus hitting the sector by around US$21m.
“The Company expects that volatility in the supply and demand for its products and reduced demand in its foodservice distribution channel will continue to adversely impact its results of operations in the second quarter of 2020,” the group stated. “The extent of the impact of the Covid-19 pandemic on the company’s financial performance, including the ability to execute on the company’s strategic initiatives, will depend on future developments, including the duration and spread of the pandemic and related government restrictions, all of which are uncertain and cannot be predicted.”