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T&G reports 63% drop in profits

T&G reports 63% drop in profits

New Zealand’s leading fruit company, T&G Global, registered a 63% fall in profits for 2018 to NZ$8.3 million. The slump comes in spite of an 11% increase in revenues. CEO Gareth Edgecombe said that 2018 had been a challenging year for T&G due to adverse market conditions, climatic events, and the impact of Chinese tariffs.

Unseasonably high temperatures caused problems for the 2018 New Zealand apple season, leading to larger sizes. Nevertheless, T&G’s star apple brands, Jazz and Envy, continue to enjoy global success. Envy is expected to perform strongly in Asia in the coming years, there has been significant increase in production area of Envy in Washington State in the US, with volumes expected to double this year as young trees reach maturity. While the poor European apple crop drove strong demand for New Zealand’s premium apples, the opposite was the case in North America.

Outside New Zealand, adverse weather conditions damaged T&G’s cherry season in both Australia and Peru. The firm’s tomatoes also suffered a setback due to unfavourable growing conditions in the first half of 2018 and a saturated market in the second half.

T&G said despite the uncertainty caused by Brexit and the international trade wars, the firm remains upbeat about the changes it is putting in place to prepare for the years ahead.

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Fresh Del Monte reports US$21.9 million loss

Fresh Del Monte reports US$21.9 million loss

Fresh Del Monte Produce has posted a net loss of US$21.9 million in the 2018 financial year. This announcement follows a strong year in 2017, when the company made a net profit of US$120.8 million. The company says the loss is mainly on account of higher fruit and distribution costs and lower banana sales. Although net sales actually climbed 10% to US$4.49 billion, gross profit fell 16% to US$279.8 million. The company said the rise in net sales was driven by its other fresh and prepared food business segments, following the purchase of Mann Packing Company.

Del Monte’s key banana division saw a 4% fall in sales to US$1.7 billion, mainly on account of lower sales volume in the Middle East and Europe and lower selling prices in Europe, partially offset by higher selling prices in the Middle East and North America.

Del Monte’s ‘other fresh produce’ segment registered a 22% increase in net sales to US$2.44 billion driven largely by the fresh-cut fruit and vegetable business. The value of gold pineapple sales fell 1% to US$487.9 million, while volumes rose 2%. Avocados sales rose 5% to US$329.2 million, with volumes up 33%, but prices down 21% and unit costs 23% lower.

Lastly, net sales of fresh-cut fruit climbed 3% to US$510.6 million, while volumes rose 2%, prices grew 1% and unit cost was up 1%. Volumes of fresh-cut vegetables quadrupled, with net sales increasing to US$433.2 million, while prices dropped 21% and unit cost was down 23%.