Fruit firm reports fall in interim profits

HIGHER energy prices and changes to the EU banana regime have cut interim profits at Fyffes by more than half.

Pre-tax profits in the six months to end June fell to €35.2 million from €74.6m a year ago, the fruit importers said yesterday.

Turnover for the period was up from €1.1 billion to €1.17bn helped by a number of acquisitions.

Fyffes has warned a number of times this year that the changes to the EU banana imports structure will cost the company €40m this year and higher fuel costs will add €15m to its shipping bill.

Fyffes said the changes in the EU’s banana import regulations have had a significant impact on the performance of the group’s tropical produce division, which includes bananas, cost the company €20.5m.

“In addition, the impact of more expensive fruit, shipping and fuel, combined with an adverse movement in exchange rates, was €16.1m during the first half,” Fyffes said. “While market conditions were less favourable for much of the period, this was largely offset by several factors including a modest increase in volumes, reduced overheads, the contribution from the group’s new Turbana joint venture in North America and an improved result in pineapples.”

Fyffes, said its general produce division, which it plans to spin off into a separate company, delivered a satisfactory outturn in the first six months of the year, with adjusted operating profits coming in at €22m, a rise of €800,000.

Earnings per share were down from 15.41c to 8.04c. The interim dividend was held at 1.69c. Last December, the company used €20m from its cash pile to pay a special dividend of 5.72c to reflect buoyant trading conditions at the time.

The company added that no date has been set for the Supreme Court hearing of its appeal against the lost of the €85m insider dealing action it took against its former shareholders, DCC.