Chiquita Brands International swung to a fourth-quarter loss, the company said yesterday (19 February), hurt by the weak euro, higher costs and an impairment charge in its salads segment.
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Asset impairment costs meant that Chiquita filed a fourth-quarter loss of $411.1m, compared to a loss of $22.5m in 2007.
On a comparable basis, the results from continuing operations for the quarter swung to a loss of $33m from income of $3m in the year-ago quarter due to higher banana production and logistics costs.
For the fourth quarter, net sales were flat year-over-year at US$839m as higher local banana prices were offset by weaker euro exchange rates, a unit volume decline in retail and foodservice salads sales, and the elimination of both non-Chiquita sales in Chile and lower-margin sales of Mexican vegetables in the company’s other produce segment.
In the company’s banana segment, net sales increased 9% to $496m principally as a result of improved pricing in North America.
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By GlobalDataFlooding impacted the fourth quarter by around $8m in higher costs, and is expected to have an incremental impact of close to $30m in 2009 due to the costs to source and ship replacement volume.
Chiquita’s salads and healthy snacks segment saw net sales decrease 10% to $295m, mostly due to lower volumes, which were partly offset by higher pricing and fuel surcharges.
Annual net sales increased 4% year-over-year to $3.6bn, as a result of higher banana pricing in each of the company’s markets and favourable average exchange rates, partially offset by lower banana volumes in core European markets.
Asset impariments meant that, on a reported basis, Chiquita saw annual net losses widen from $45.7m to $325.2m. However, Chiquita posted underlying net income of $48.6m for 2008, against a loss of $6.9m in 2007.
“Although the economic environment is uncertain, we expect to improve full-year results in 2009 on a comparable basis,” said Fernando Aguirre, chairman and chief executive officer. “We believe we have the right products and strategy to leverage global health and wellness trends and are executing our profit improvement plans in salads, maintaining our focus on profitability in bananas, and innovating toward higher-margin products.”
