Chiquita slips to first-quarter loss

Group hit by weaker European banana demand and pricing following harsh winter weather and ongoing tough economic conditions

Fresh produce multinational Chiquita has revealed today that it made a loss from continuing operations of US$4m (€3m), or US$0.09 per diluted share, during the first quarter (Q1) of the year, down from the US$22m (€16.6m) profit recorded in the same period of 2009.

Net sales fell 4 per cent year-on-year to US$808m (€610m), with the European market proving a difficult one for the group through the opening three months of the year.

"Our North American salad and banana businesses performed well in the first quarter," said Fernando Aguirre, chairman and chief executive officer of Chiquita. "However, as previously announced, European banana demand and pricing were negatively impacted by the harshest winter weather in 30 years and depressed economic conditions which have affected commerce across Europe.

"Revitalizing our European profitability in 2010 is our most important priority," Mr Aguirre continued. "Weeks ago, we began implementing a five point plan to improve pricing, execute significant cost improvements throughout our supply chain, permanently capture the EU tariff reductions, reduce our selling and administrative costs and increase distribution, which taken together will enable us to overcome these early headwinds."

In the banana segment, Chiquita's sales dropped 2 per cent year-on-year to US$477m (€360m) on European performance, with comparable operating income down to US$4m (€3m) from US$40m (€30m) in 2009.

Net sales fell 8 per cent to US$259m (€195.6m) in salads and healthy snacks, Chiquita said, due to lower volumes in the retail value-added salads category. Comparable operating income improved to US$20m (€15.1m) from US$13m (€9.8m) in 2009, even as the company invested more in consumer marketing and experienced greater retailer activity in private label products.

Looking ahead, Mr Aguirre said that Chiquita remained focused on executing its long-term plans for profitability, and could put aside what he described as "quarterly volatility".

"We believe that the resilience of our diversified portfolio of businesses in North America and Europe will lead us to another full year of strong profitability and we still expect to achieve our full-year target of US$110m-US$120m (€83m-€90m) of comparable income," he noted.