Fresh Del Monte Produce Inc. has reported financial results for the second quarter ended July 1, 2022.
"We delivered strong net sales during the second quarter, marking the fifth consecutive quarter of net sales growth compared with the prior-year periods — demonstrating the resilience of our iconic brand. Our net sales increased by $70 million, resulting from necessary pricing actions — generating growth across most product categories," said Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer.
"We continue to operate in one of the most volatile and uncertain macroeconomic environments in recent history. As a result, the cost of product sold increased by $100 million, driven by broad-based inflationary, supply chain, and logistical headwinds. Despite these headwinds, we generated positive earnings — all while maintaining our debt balance in line with last year, generating strong cash flow from operations and continuing our dividend payout."
Mr. Abu-Ghazaleh added, "As we move forward, I am confident in our team's dedication to drive profitable sales. We plan to do that by focusing on our sustainable growth strategy and delivering against its key elements — organic expansion, product innovation, investments in technology, best-in-class customer relationships and sustainability."
Net sales for the second quarter of 2022 increased $70.3 million, or 6%, compared with the prior-year period. Net sales benefited from inflation-justified price increases. Partially offsetting the increase was the negative impact of fluctuations in exchange rates, primarily versus the Japanese yen and euro compared with the prior-year period. The negative impact of fluctuations in exchange rates was partially mitigated by our foreign currency hedges.
Gross profit for the second quarter of 2022 was $80.7 million compared with $110.0 million in the prior-year period. Despite higher net sales, gross profit continued to be negatively impacted by multilayered cost pressures compared with the prior-year period. Higher costs across the board including costs of packaging materials, fertilizers, ocean and inland freight, fuel and labor, offset our higher net sales.
Operating income for the second quarter of 2022 was $34.3 million compared with $59.3 million in the prior-year period, and Adjusted operating income was $33.4 million compared with $60.6 million in the prior-year period. The decrease in operating income was primarily due to lower gross profit, partially offset by lower administrative and advertising expenses.
Provision for income taxes for the second quarter of 2022 was $4.9 million compared with $4.8 million in the prior-year period. Provision for income taxes in the prior-year period reflected the positive impact of return-to-provision adjustments, including a $0.8 million benefit relating to the Coronavirus Aid, Relief and Economic Security (CARES) Act.
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For more information:
Ana Miranda
Fresh Del Monte Produce Inc.
Tel.: +1 305-520-8433