Business

Dole shares rise after earnings jump

Dublin-based fruit and vegetable firm sees revenue top $2.1bn

Dole is the largest fruit and vegetable supplier in the world.

Peter Flanagan
Wed May 15 2024 - 15:45

Fruit and vegetable giant Dole said earnings for the first quarter of the year jumped, as it booked a $74 million (€68.2 million) gain on the sale of its stake in another company and cut its debt.

The Dublin-based company said earnings from continuing operations jumped to $71.5 million in the three months to the end of March, compared to $35 million a year ago. On an adjusted basis, the company posted net earnings before interest, tax, depreciation and amortisation (ebitda) of $110.1 million, about $9.7 million ahead of the same period in 2023.

Dole is the largest supplier of fresh fruit and vegetables in the world. It was created after Irish-based Fyffes spin-out Total Produce acquired Dole Food Company in 2021.

“Our strong start to the year positions us well to deliver another good result in 2024,” executive chairman Carl McCann said in a statement. “For the full year, we are maintaining our target to deliver adjusted ebitda in line with 2023 on a like-for-like basis.”

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“Adjusting for the sale of Progressive Produce, this implies an Adjusted EBITDA target of at least $360 million,” he added.

Revenue rose 6.6 per cent to $2.1 billion, driven by what the company called a “strong performance across all segments” as well as a $12.8 million gain on favourable foreign exchange rates.

Dole will pay a quarterly dividend of 8 cents per share.

The results were “robust,” Davy analyst Gary Martin wrote in a research note. The like-for-like adjusted ebitda growth was about 10 per cent ahead of consensus, he added.

Dole shares rose 3 per cent in early trade in New York after the earnings were published. The stock is up about 3.3 per cent on the year so far.

Dole booked a $74 million gain on the sale of its stake in Progressive Produce, which closed in March. Those funds helped contribute to a $100 million paydown of the group’s long term debt. Net debt now stands at $776 million.

A “strong” performance in Ireland, the UK and northern Europe as well as a foreign exchange gain helped push revenue across it’s fresh produce for Europe, Middle East and Africa unit up 7 per cent to $853.6 million. It’s fresh fruit unit saw sales increase 3.2 per cent on the back of higher sales of bananas and pineapples, even as global pricing for bananas fell.

The company reiterated it expected capital expenditure from continuing operations guidance to be between $110 million and $120 million. It is cutting its interest expense guidance to between $75 million and $80 million.

Peter Flanagan

Peter Flanagan

Peter Flanagan is an Assistant Business Editor at The Irish Times

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