Tropical fruit volume boosts Fyffes profits in 2014
![Tropical fruit volume boosts Fyffes profits in 2014 Tropical fruit volume boosts Fyffes profits in 2014](https://cdn.freshfruitportal.com/2020/01/News-shutterstock_356279348.jpg)
Produce multinational Fyffes Plc (ESM: FFY) will be pursuing price increases in all markets this year in response to the strengthening of the U.S. dollar against the euro, with an EBIT forecast of €36-42 million.
The group released this plan with its preliminary 2014 results today, announcing an EBIT rise of 28.1% for the year to €40.1 million.
The large profit jump comes despite only a marginal rise in total revenue of 0.8%, in a year characterized by the key performance drivers of average selling prices, exchange rates and the costs of fruit, shipping and fuel.
Fyffes also made a net surplus of €4.3 million from payments made by Chiquita after the merger between the two produce giants fell through. Now, the company has stated it is "actively pursuing" a number of attractive acquisition opportunities.
The multinational said its increase in turnover reflected organic volume growth in the pineapple and melon categories, offset by price deflation in bananas and pineapples.
"The Group again delivered an improved result in pineapples in 2014 and has moved closer to its target returns in the category," Fyffes said.
"As in the banana category, there was modest price deflation during the year. Offsetting this, the Group achieved a reduction in production costs, particularly in its operations in Costa Rica following the successful integration of the second farm acquired there in early 2013.
"Fyffes increased its pineapple volumes by 10% in 2014, with 65% of this being produced by the Group’s own farms."
The group highlighted a "strong" result for melons for the year, while the banana business was able to benefit on the logistics side.
"Farming efficiency [in melons] continued to improve, contributing to a low double digit increase in volumes, consolidating the Group’s market leading position in this category in the US.
"Overall banana volumes were marginally up in 2014, although there were some changes in the mix of customers.
"There was further inflation in the cost of fruit during 2014, continuing a multi-year pattern, but this was offset by lower shipping and other import costs, including the benefit of a 6% reduction in bunker fuel costs."
Photo: www.shutterstock.com