Del Monte’s share dividends slumped in the third quarter on the back of oversupply of bananas. CEO Mohammad Abu-Ghazaleh said.
“The quarter was marked by one of the industry’s worst oversupply of bananas in several years.”
The firm’s gross profits were down largely due to the lower selling prices in both its banana business segment and in its processed pineapple food business segment.
Del Monte’s net sales of bananas for the third quarter of 2017 decreased to $409.2 million, compared with $424.4 million in the third quarter of 2016. Sales volumes were actually 6% higher than during the same period in 2016. The global price fell by $1.40 (9%) to $13.53 per unit, compared with $14.93 per unit in the third quarter of 2016. Gross profit for the third quarter of 2017 decreased to $5.7 million, compared with $39.6 million in the third quarter of 2016. Unit cost was 1% lower than the prior year period.
There was better news elsewhere in the firm’s other fresh produce lines, where net sales for the third quarter of 2017 increased to $468 million, compared with $433.6 million in the third quarter of 2016. The increase in net sales was attributable mainly to the increase in net sales in the firm’s fresh-cut and avocado product lines.