Belgium-headquartered produce multinational Greenyard has reduced its profit forecast for the 2018-19 financial year following a challenging November and December.

The company faced difficulties throughout much of 2018 related to a hot and dry period in the continent which led to volume and price fluctuations in both fresh and frozen produce, as well as a recall of frozen products linked to a Listeria outbreak that it estimates cost €30 million.

It said its financial outlook improved in the fall period but did not last long.

"After summer, results of September and October picked up. Unfortunately, these early signs of recovery reversed in November and December," it said.

"On one hand, this was caused by the competitive retail landscape with further increasing price pressure in Fresh product categories, predominantly in Germany and Belgium. On the other hand, continuously increasing quality and service requirements from retailers in Fresh and in Long Fresh are pushing up suppliers’ cost and waste levels."

Sales are lagging behind last year by 4.5%, it said, which has impacted on margin generation. The company has therefore revised it REBITDA forefast for 2018-19 to a range of €60-65m, after the sale of the Horticulture segment at end of 2018.

"Greenyard is currently further transitioning its organization into a vertically integrated partner for its retail customers. Achieving this implies an important change for Greenyard and the retailers," it said.

"Greenyard strongly believes that the fruit and vegetables market of the future will be operated more efficiently by a limited number of large players that partner closely with their customers. In the short term, this brings challenges and requires a new way of working in the market. However, in the longer term, the partnership model will reduce waste, improve quality for the consumer and improve margins in the value chain."

It went onto say that based on this current "ongoing market imbalace", the measures it took over the last six months -  including in the areas of fields of purchasing and procurement, systems and processing - "have not been sufficient to close the gap".

"Therefore, building further on these medium-term actions, a transformation team has been set up and is led by, Marc Zwaaneveld, a seasoned senior manager with a proven track record, who also joins the Leadership Team. The new team is developing a comprehensive turnaround plan which will include actions that will be implemented immediately," it said.

"Hence, Greenyard will focus as well on additional commercial achievements and acceleration of the started mid-term projects as on aligning the overall cost base."