Fruit group Fyffes has reported a significant but expected decline in first-half profits and said it is on track to meet market expectations for the full year.

Pre-tax profit fell 11 per cent to €15.7 million in the six months to the end of June, a decline the company attributed to falling banana prices and rising fuel costs. The decline was 33 per cent, to €13.1 million.

Revenue meanwhile jumped 45 per cent to €286.2 million, though the company said the latest figures couldn't be directly compared with the prior period due to the way in which sales to Total Produce, the tropical fruit division which was spun off from Fyffes last year, were treated. Taking this into account, the underlying comparable percentage increase in Fyffes's revenue was in the mid-teens.

David McCann, Fyffes' chairman, welcomed the figures.

Fyffes has made no secret of the pricing pressure in the banana market and in May was forced to cut its full-year earnings target by 25 per cent, citing increases in fuel prices and losses in a Brazilian joint venture.

As a result one Dublin trader said yesterday's figures were simply putting a rubber stamp on what we already knew. Analysts however were more upbeat.

Paul Meade of NCB and Davy's John O'Reilly both said they believe there is potential for upside to the company's reiterated full-year guidance of adjusted earnings before interest and taxation of €15 million.

They cited both the favourable summer banana pricing trends in Europe and the good organic volume growth reported in bananas - up 15 per cent - and pineapples - up 20 per cent.

Shares in Fyffes rose 2.5 per cent, before falling back to close unchanged at 80 cent.

The company will pay an interim dividend of 0.5 cent per share. This compares to 1.69 cent last year.

Fyffes is waiting to hear how much it will receive as a result of its successful Supreme Court appeal over the sale of DCC's stake in the company in 2000. It said yesterday it had added back into its accounts €7.5 million originally set aside to pay DCC's costs in the High Court case.

Fyffes also said yesterday it will vigorously defend itself against allegations that it was involved in a price-fixing cartel. It is believed to be facing fines of as much as €50 million if it is found to have breached EU competition rules.