Banana cargo alignment move gives Chiquita flexibility
Banana cargo alignment move gives Chiquita flexibility
Chiquita Brands International Inc., based in Cincinnati, has agreed to sell its 12 refrigerated cargo vessels for $227 million. The ships will be chartered back from an alliance formed by Eastwind Maritime Inc. and NYKLauritzenCool AB.
The parties also entered a long-term strategic agreement in which the alliance will serve as Chiquita's preferred supplier in ocean shipping to and from Europe and North America.
Fernando Aguirre, Chiquita's chairman and chief executive officer, said in a press release that this long-term shipping agreement "is an important step in the execution of our strategy to return to profitable, sustainable growth. In a nutshell, we could not have asked for a better transaction. We will increase our financial flexibility, simplify our business model and focus on the marketplace to provide branded, healthy, fresh foods to consumers worldwide, while we let the right experts deliver as good or better results in our shipping operations."
In a May 1 press release, Chiquita also released financial and operating results for the first quarter 2007. First quarter net sales increased by 3 percent year over year to $1.2 billion, and the company reported a net loss of $3 million, including a charge of $5 million, related to a decision to exit certain unprofitable farm leases in Chile. This compares to net income of $20 million in the year-ago period.
Net sales for banana segment increased 8 percent to $523 million. Segment operating income was $33 million, compared to $37 million in the same quarter in 2006.
"During the first quarter, we continued to make good progress in both our banana and salad operations," Mr. Aguirre said in the press release. "In Europe, we grew volume while maintaining our premium market position and profitability, despite last year's onerous regulatory changes. In our North American banana business, we also grew volume, recovered cost increases and are successfully introducing higher-margin, innovative products to differentiate the 'Chiquita' brand. At Fresh Express, we have strengthened our No. 1 position in retail value-added salads and reinforced our food safety leadership in the face of soft consumer demand for packaged salads. While these primary segments are improving, we have also taken decisive actions to improve profits in our other produce operations, including exiting certain farm operations in Chile."
The parties also entered a long-term strategic agreement in which the alliance will serve as Chiquita's preferred supplier in ocean shipping to and from Europe and North America.
Fernando Aguirre, Chiquita's chairman and chief executive officer, said in a press release that this long-term shipping agreement "is an important step in the execution of our strategy to return to profitable, sustainable growth. In a nutshell, we could not have asked for a better transaction. We will increase our financial flexibility, simplify our business model and focus on the marketplace to provide branded, healthy, fresh foods to consumers worldwide, while we let the right experts deliver as good or better results in our shipping operations."
In a May 1 press release, Chiquita also released financial and operating results for the first quarter 2007. First quarter net sales increased by 3 percent year over year to $1.2 billion, and the company reported a net loss of $3 million, including a charge of $5 million, related to a decision to exit certain unprofitable farm leases in Chile. This compares to net income of $20 million in the year-ago period.
Net sales for banana segment increased 8 percent to $523 million. Segment operating income was $33 million, compared to $37 million in the same quarter in 2006.
"During the first quarter, we continued to make good progress in both our banana and salad operations," Mr. Aguirre said in the press release. "In Europe, we grew volume while maintaining our premium market position and profitability, despite last year's onerous regulatory changes. In our North American banana business, we also grew volume, recovered cost increases and are successfully introducing higher-margin, innovative products to differentiate the 'Chiquita' brand. At Fresh Express, we have strengthened our No. 1 position in retail value-added salads and reinforced our food safety leadership in the face of soft consumer demand for packaged salads. While these primary segments are improving, we have also taken decisive actions to improve profits in our other produce operations, including exiting certain farm operations in Chile."
