Fresh Del Monte Produce Inc. today reported financial results for the third quarter and the nine months ended September 29, 2023.
“We delivered solid results for the first nine months of 2023 driven by higher gross margins, strong adjusted EBITDA and adjusted earnings per share growth compared with the same period last year. We also continued to return shareholder value by reducing our debt, improving efficiencies and continuing to deliver innovation-led, new-to-market products,” said Mohammad Abu-Ghazaleh, Fresh Del Monte’s Chairman and Chief Executive Officer.
“Our recently published annual sustainability report outlines the progress we’ve made on our goals in various areas including shrinkage and waste — goals reached through initiatives we believe will lead to sustainable growth.”
Financial highlights for the third quarter 2023
Net sales for the third quarter of 2023 were $1,003.1 million compared with $1,053.5 million in the prior-year period. The net sales variance was primarily driven by lower sales volume in the fresh and value-added product segment and a decrease in sales in the other products and services segment due to softened global demand in our third-party ocean freight business. Partially offsetting the net sales variance were higher selling prices of non-tropical fruit and fresh-cut fruit and higher volumes and per unit selling price of avocados.
Gross profit for the third quarter of 2023 was $74.4 million compared with $88.0 million in the prior-year period. Gross profit was impacted by lower sales volume across most products, a stronger Costa Rican colon and Mexican peso, and the inventory write-off and clean-up costs related to the flooding of a seasonal production facility in Greece due to heavy rainstorms, partially offset by lower distribution and ocean freight costs. Excluding the impact from the inventory write-off and clean-up costs related to the flooding, Adjusted gross profit(1) for the third quarter of 2023 was $82.8 million compared with $88.0 million in the prior-year period. There were no other product-related charges in the prior-year period.
Operating income for the third quarter of 2023 was $25.4 million compared with $51.0 million in the prior-year period. The variance in operating income was primarily due to lower gross profit, impairment charges due to low-yield banana farms in the Philippines, and the damage related to the floods in Greece. Excluding these items, Adjusted operating income was $34.3 million compared with $41.2 million in the prior-year period.
Adjusted operating income also excludes a $2.0 million gain on sale primarily related to the sale of a carrier vessel. In the prior-year period, Adjusted operating income excludes a $9.9 million one-time benefit related to a reduction in a North America environmental reserve.
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Fresh Del Monte Produce Inc.
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