Chiquita’s Restructuring Efforts Improve Company’s 1Q Operations
Chiquita Brands International Inc. earlier this week released financial and operating results for the first quarter of 2013, reporting net income of $2 million for the period compared to net loss of $11 million for the first quarter of 2012. The Charlotte, N.C.-based company also reported comparable operating income of $23 million compared to $13 million for the same period of 2012.
“We continue to execute against our previously announced restructuring plans and strategy to focus on our core products,” said Ed Lonergan, Chiquita’s president and CEO. “We are pleased that our first quarter results reflect the initial benefits from these strategic decisions and actions. The improvements overcame euro exchange rates that negatively impacted this quarter by $12 million after hedging, and we view these results as a clear sign of the progress we are making and a good first step toward achieving our long-term financial targets.
“Performance in our core businesses continues to improve,” he added. “In both our North American bananas business and our salad business, we have responsibly increased segment shares with new contracts and through improved velocity with existing customers. In Europe, we have continued to prioritize profitable contracts and have shed arrangements that did not meet our profit targets. We also continue to focus on improving productivity and remaining disciplined in our value chain and overhead spending. With the recently announced addition of Rick Frier to our management team, we believe that we have the pieces in place to execute our strategy and achieve our long-term financial goals.”
• Bananas: Comparable net sales decreased 3 percent to $505 million primarily due to reduced volumes in Europe, a result of the strategic decision to prioritize price over volume, negative impacts from the net hedged euro rate, and lower prices in North America. These factors were partially offset by higher local currency pricing in Europe and increased volume sales of bananas in North America. Improvements in sourcing and logistics cost related to Chiquita’s value chain restructuring more than offset the decrease in sales, and comparable operating income increased to $27 million in the first quarter of 2013 from $25 million in the same period of 2012.
• Salads and healthy snacks: Net sales increased 1 percent to $240 million as foodservice and healthy snack sales offset lower sales of retail value-added salads. Comparable operating income was $8 million for the first quarter of 2013 vs. $2 million comparable operating income in the same period of 2012, principally due to the savings from restructuring activities, deferrals in marketing expenditures and exiting non-core businesses, which more than offset increased industry costs in the quarter.