Fyffes warns of rising fruit prices

TROPICAL FRUIT supplier Fyffes has warned of further rises in fruit prices, as the company posted better-than-expected results for the first six months of the year, prompting an upgrade to its full-year guidance.

Fyffes increased its full-year target Ebitda (earnings before interest, tax and amortisation) estimate to between €28 million and €33 million.

This is up from €25 million to €30 million previously, as the company reported a sharp increase in revenue and profits.

The 11 per cent rise in earning guidance in the six months to the end of June gave a strong boost to its share price, with Fyffes closing up almost 6.5 per cent higher at €0.50. Revenue was up 20 per cent on the year, reaching €550 million for the period, aided somewhat by favourable exchange rates on translation of sales in the group’s sterling and dollar denominated operations.

Adjusted Ebitda was 36 per cent higher at €28.1 million, while pretax profits grew by 30 per cent to €22.4 million.

The strong performance reflected organic growth across all Fyffes’s product categories, the company said, despite the impact of adverse currency movements and higher fuel costs.

The Dundalk-headquartered business imports and sells melon, pineapples and bananas to markets across the world.

The company’s melon business continued to perform well, Fyffes said yesterday, being boosted by the expansion of operations in Guatemala and the opening of a sales office on the west coast of the US.

Its banana business achieved a €3.9 million increase in operating profit year on year, while the company’s pineapple operations benefited from an 8 per cent increase in volume and from lower shipping costs.

Commenting on its current trading position, Fyffes said it “continues to pursue necessary increases in selling prices in all markets to offset the impact of adverse exchange rate movements and the higher cost of fuel and fruit”.

The company has increased its dividend by 7.4 per cent on a year-on-year basis to €0.65.

According to the company, it is now the number one melon importer in the US and has eclipsed Chiquita as the largest banana importer in Europe.

Fyffes plc is listed on the Irish Enterprise Securities Market (ESM) in Dublin and the Alternative Investment Market (AIM) in London.