Del Monte spent $41M exiting Hawaii, Kenya
GEORGE TOWN, Cayman Islands » Fresh Del Monte Produce Inc., which grows and markets fruits and vegetables, posted its third straight quarterly loss as sales of fresh produce declined. The company also took a multimillion-dollar charge associated with the shutdown of its operations in Hawaii and Kenya.
The third-quarter net loss was $83.6 million, or $1.45 a share, compared with a net profit of $5.7 million, or 10 cents, a year earlier, the company said today in a statement. Sales fell 1.5 percent to $729.6 million.
Profit was hurt by "weakness" in the prepared foods business, poor sales of fresh vegetables and a surplus in the European banana market, Fresh Del Monte said. It will be more selective about what it produces and sells, Chief Executive Officer Mohammad Abu-Ghazaleh said on a conference call.
"This allows us to control the supply and bolster prices," he said. "If a product isn't profitable, we won't produce it or procure it."
The company spent $40.8 million closing operations in Hawaii and Kenya. The company announced in February that it was pulling out of Hawaii after more than 100 years, phasing out 700 jobs in the islands.
It also spent $18.4 million restructuring its North American transportation business and South African canning facilities.
Excluding those expenses, the company said it lost 42 cents a share in the third quarter. Fresh Del Monte was expected to lose 24 cents, the average estimate of three analysts surveyed by Thomson Financial.
Fresh Del Monte suspended future dividends. The company, which keeps its headquarters in Coral Gables, Florida, said it will pay the 5-cent dividend announced Oct. 11.