Fruit and vegetable producer Total Produce experienced a 1.8% increase in revenue to €2.2 billion in the first half of its financial year, however its European operation was impacted somewhat by "unusual weather patterns", the company said.
Adjusted EBITDA was up 7.4% to €56.7 million, the company said. Profit before tax rose 19.4% to €42.3 million.
On a like-for-like basis, excluding acquisitions, divestments and currency translation, Total Produce said that revenue was in line with the same period the previous year, "with a marginal increase in volume offset by a small decrease in average prices".
Weather Forecast
The group said that the weather Europe impacted its supply and demand dynamics in the early months of the period, which affected its production and trading capabilities. In addition, volume gains in North America helped offset declines in its South America operation.
In terms of its Eurozone operations, including France, Ireland, Italy, the Netherlands and Spain, revenue was down 3.2% to €874 million, as a result of weather impact, however Southern Europe performed stronger.
In its non-Eurozone operations, which includes Czech Republic, Poland, Scandinavia and the UK, revenue was down 2.4% to €781 million, with currency translations and weather impacting its performance.
"The Group continues to target full year growth excluding the impact of the Dole transaction and the related share placing," commented Carl McCann, Total Produce chairman.
"As announced on 1 February 2018, the Group entered into an agreement to acquire a 45% stake in Dole Food Company, one of the largest fresh produce companies in the world, for $300 million along with options to further increase the Group’s stake. The transaction completed on 31 July 2018 having received regulatory approvals."
Analyst Comment
Commenting on Total Produce's performance, analyst Roland French of Davy Stockbrokers said that Total Produce posted a 'resilient' performance in the period.
"Against a backdrop of sector-wide challenges, Total Produce’s interim results reflect a resilient business model," French said. "H1 adjusted EBITA was in line with forecasts and increased 11.7% on a constant currency basis. FY18 outlook for the core business remains unchanged. The Dole transaction completed on July 31st 2018 – Dole’s H1 EBITDA was impacted by an industry-wide product safety notice, which lowered profitability in its Fresh Vegetables segment. The core Fresh Fruit division "performed well".
"Given continued adverse weather, we will trim our underlying adjusted EPS (c.1%). The group is credibly emerging as a pre-eminent player in the global fresh produce market."
© 2018 Hospitality Ireland – your source for the latest industry news. Originally article by Stephen Wynne-Jones for European Supermarket Magazine, edited for Hospitality Ireland by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.
