Fyffes keeps to full-year forecast

FYFFES has maintained its full-year earnings guidance of between €14 million and €18m, despite tough trading conditions knocking nearly €5m off its first-half profits.

The Dublin-headquartered fruit distribution giant yesterday reported adjusted pre-tax profits of €13.3m for the first six months of this year; down from €18.6m for the same period last year.

When exceptional items and Fyffes’ share of results from its spun-off property company, Blackrock International Land, were taken into account, the pre-tax profit amounted to €10.3m for the period – down from €12.63m on a year-on-year basis.

Earnings per share (on an adjusted, fully-diluted basis) fell from 4.46c to 3.38c, but total group revenue (including Fyffes’ share of its various joint ventures) rose slightly to €402.6m, up from €400m at the same stage last year.

The company kept its interim dividend payment to shareholders unchanged at 55c per share.

According to the group’s chairman, David McCann: “Trading conditions were difficult for much of the first half of the year, as previously indicated – resulting in a significant reduction in profits in the group’s banana category.

“Market conditions have normalised during the summer months and we continue to pursue increases in selling prices in all markets. We’re maintaining our €14m-€18m EBITA (earnings before interest, tax and amortisation) for the full year,” he added.

The likes of EBITA and EBIT are the metrics that the market tends to look at most closely for firms such as Fyffes and the company’s adjusted earnings before interest and tax (EBIT) was €13.1m for the first half of the year, down from €18.1m for the first half of last year.

Nevertheless, this hasn’t totally put off analysts in terms of their outlooks.

“Management is maintaining its full-year guidance of €14m-€18m.

“Currently we’re forecasting at the lower end of the range. However, with Fyffes having achieved €13.1m in the first half, we expect to be increasing this forecast marginally, as the second half of the year accounts for only around 10% of total profits,” commented Goodbody Stockbrokers’ Killian Murphy.