Fresh Del Monte Raises Dividend on Strong Cash Flow
Fresh-Cut, Avocado Product Lines Experiencing Growth
New York, NY — Fresh Del Monte Produce Inc (NYSE:FDP) said its board has approved to raise its quarterly cash dividend by 17% to $0.15 per share as a result of its continued strong operating cash flow and solid performance, the company said in a statement.
Fresh Del Monte also reported earnings per diluted share of $1.86 for the second quarter, compared with earnings per diluted share of $1.21 for the same period a year ago. Comparable earnings per diluted share were $1.75 in the second quarter, compared with comparable earnings per diluted share of $1.18 in the second quarter of 2015.
“We are pleased with our performance in the second quarter,” said Mohammad Abu-Ghazaleh, chairman and chief executive officer. “We continued to see strong growth in our fresh-cut and avocado product lines. We achieved higher selling prices in our pineapple and banana business segments, and we benefited from lower input costs and cost-reduction initiatives that directly improved our bottom-line performance.” (Source: “Fresh Del Monte Produce’s Board of Directors Votes to Increase Quarterly Dividend,” Investor Relations, Fresh Del Monte, August 3, 2016.)
Net sales for the second quarter were $1.01 billion, compared with $1.134 billion in the second quarter of 2015. The decrease in net sales was due to lower sales volume in the company’s other fresh produce and banana business segments as a result of inclement weather that decreased production, as well as the negative impact of unfavorable exchange rates.
Gross profit for the second quarter of 2016 was $145.4 million, compared with $114 million in the second quarter of 2015. The $31.4-million increase in gross profit was attributable to higher gross profit in all of the company’s business segments, principally due to higher selling prices in the company’s other fresh produce and banana business segments, along with lower transportation and banana production and procurement costs.
Operating income for the second quarter of 2016 was $106.7 million, compared with operating income of $73.6 million in the second quarter of 2015. Comparable operating income was $100.9 million in the second quarter of 2016, compared with comparable operating income of $72.1 million in the second quarter of 2015.
“We also continued to invest in our diversification strategy and advanced our global business platform during the quarter,” the company said in a statement. “Our investment in diversifying our products and geographies over the years resulted in solid second quarter results, despite weather issues which negatively affected sales volume in several of our product lines.” (Source: Ibid.)