Fyffes grows profits despite tough year

FRUIT importer and distributor Fyffes made pre-tax profits of €21.3 million last year, up marginally on the 2009 figure.

When the group’s 40% share of the after-tax losses of property group Balmoral of €8.3m are deducted the profit is reduced sharply to €8.8m for the year.

Total sales (including the share of joint ventures) was 2% higher at €742.1m, while earnings per share rose 6% to 5.5 cent against 5.19c in 2009.

The group has also declared a higher final dividend of 1.2c, an increase of 9% on the 2009 figure.

Group revenues when the joint ventures element is deducted came to €623.1m, up 4.2% on 2009, mainly due to an increase in activity and volumes in the group’s US melon business.

Group chairman David McCann said results were “satisfactory” given the difficult trading conditions that prevailed in the banana market in early 2010.

In its statement with the results, the group said the prolonged exceptionally cold weather throughout Europe during the first three months and excess market supplies during much of the first half “resulted in a significant reduction in operating profits in the category”. Banana profits were also significantly impacted by adverse exchange rates as a result of the relative strength of the dollar against the euro and sterling during 2010.

The group’s key input costs including fruit, shipping and fuel were all again higher in 2010, but those were offset by the reduction in import duty.

Fyffes said it achieved necessary increases in selling prices in its key markets in the second half of the year, although this was insufficient to offset the shortfall in profits in the first half.

Commenting on the current state of the industry, Mr McCann said trading in the first two months maintained the improvement seen by the group in the second half of the year, creating a broadly satisfactory situation at this point in the current trading year.

Fyffes is one of the largest tropical produce importers and distributors in Europe. The group is primarily involved in the production, procurement, shipping, ripening, distribution and marketing of bananas, pineapples and melons.