Dole Food Co. has insisted its first-quarter results were in line with expectations after underlying earnings were hit by a fine for alleged anti-competition practices in the EU.
The US produce giant sold its worldwide packaged foods and Asian fresh produce operations to Japan’s Itochu Corp. earlier this year.
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Yesterday, it reported numbers for its remaining businesses and said profits fell year-on-year.
Income from continuing operations was US$4m for the quarter to 23 March, compared to $26m a year earlier. Adjusted EBITDA was $34m, against $44m last year. However, Dole said the results included a charge of $34m related to the EU’s decision to fine Dole for allegedly sharing information with other banana importers a decade ago. Revenue from the businesses left after the Itochu deal fell 3% to $1.05bn.
Nevertheless, Dole president and COO Michael Carter said: “Dole’s first quarter performance is in line with our full-year expectations for 2013, at the low end of the guidance range of $150–$170 million. First quarter adjusted EBITDA from both of our remaining lines of business exceeded last year. Earnings grew in all of our core fresh fruit product lines. Fresh vegetables performance improved largely due to a turn-around in the fresh-packed product line.”
Looking ahead, he added: “We expect second-quarter adjusted EBITDA to approximate half of first-quarter adjusted EBITDA, excluding the $34m charge, with lower earnings from both our fresh fruit and fresh vegetables businesses. This volatility is especially pronounced in our legacy strawberry business, where we expect earnings to be down by $15–$20m in the first half of 2013, compared to 2012. During the last six months our strawberry growing regions in California have experienced extreme warm weather followed by unusual cold weather and now warm weather again. As for full year 2013, we expect the overall lower earnings in the bananas and berries product lines to put pressure on our expected adjusted EBITDA at the low end of the guidance range. The impact of higher expected volumes in these product lines is more than offset by expected lower prices and higher costs.”
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