Lower net sales in Chiquita Brands International's banana and 'other produce' segments contributed to the entity's net losses more than doubling during the first quarter of 2015. 

The multinational reported a 4.8% year-on-year drop in sales, and a net loss of US$64.6 million for the period against US$24.6 million last year.

Chiquita attributed the 6.1% fall in net sales for the banana segment to lower volume in North America and Europe due to weather conditions and the impact from foreign exchange offset slightly by higher banana pricing.

The company noted that despite lower banana sales, the category had in fact performed better year-on-year due to significantly lower sales costs, partially as the result of improved productivity in Central America and market supply shortages.

The banana segment also benefited from lower fuel costs, shipping and logistics efficiencies, and decreased spot purchases.

Sales of salads and healthy snacks remained flat while 'other produce' sales took a tumble of 21.9%, primarily due to weather conditions.

Chiquita confirmed that approximately 300 employees in Latin America had been affected by a reduction in force during January and February. Severance payments were roughly US$5 million for the quarter.

The organization also disposed of an African sourcing business for the bananas segment in the financial period, creating a loss of less than US$1 million.

Plans to transition operational departments from Charlotte, North Carolina, to other locations closer to customers and operations were also reaffirmed.

The company, which is being acquired by Brazilian groups Safra and Cutrale in a US$681 million deal, said total transaction costs associated with the transition are expected to be in the range of US$25-40 million, and the move is anticipated to take 12-18 months from the original announcement in January.

Costs of US$48 million were also incurred during the quarter in connection with the merger agreement and the terminated Fyffes 'strategic combination'. The costs related to legal, advisory and other expenses.

Photo: www.shutterstock.com

www.freshfruitportal.com