Fresh Del Monte Produce Inc. (NYSE: FDP), a global leader in fresh and value-added produce, has released its financial results for the fourth quarter and full fiscal year ended December 27, 2024. The company’s latest earnings report reflects its ability to maintain strategic focus and operational efficiency despite facing challenges throughout the year.
“Our full-year 2024 results underscore the effectiveness of our strategic initiatives and operational improvements. This success, achieved in the face of numerous challenges, was primarily driven by the outstanding performance of our fresh and value-added products segment, particularly pineapples, avocados, and fresh-cut fruit. These categories have continued to fuel our growth and contribute significantly to strong gross margins,” stated Mohammad Abu-Ghazaleh, Fresh Del Monte’s Chairman and Chief Executive Officer.
Abu-Ghazaleh also highlighted key achievements from the past year, including a reduction in long-term debt fueled by strong cash flow and a third consecutive annual increase in the company’s quarterly dividend. “Building on this momentum and focusing on our core strengths, we remain committed to expanding key segments and delivering sustainable value for our shareholders,” he added.
Fourth Quarter 2024 Financial Highlights
Fresh Del Monte Produce recorded net sales of $1,013.2 million for the fourth quarter of 2024, a slight increase compared to the $1,008.6 million reported in the same period in the previous year. This growth was largely driven by increased net sales in the company’s fresh and value-added products segment, supported by higher per-unit selling prices. However, the gains were partially offset by a decline in net sales within the banana segment, attributed to lower per-unit selling prices and reduced sales volume. Additionally, the company’s other products and services segment also experienced a decline in net sales.
The company’s gross profit for the fourth quarter stood at $68.7 million, up from $62.5 million in the prior-year period. This increase was mainly a result of higher net sales in the fresh and value-added products segment. Nevertheless, the banana segment’s lower per-unit selling prices, along with increased per-unit production and procurement costs, partially offset the overall gross profit increase.
Adjusted gross profit for the quarter was $68.9 million, compared to $56.2 million in the same quarter of 2023. The adjusted figures exclude $0.2 million in other product-related charges, largely tied to inventory write-offs due to flood damage at the company’s melon farms in Costa Rica. By comparison, the previous year’s adjusted gross profit excluded a $6.9 million insurance recovery related to severe flooding in the company’s Greece production facility in 2023, along with $0.6 million in inventory write-offs resulting from shipment rerouting amid the conflict in the Red Sea.
Operating income for the fourth quarter saw a significant improvement, reaching $30.3 million, compared with an operating loss of $113.4 million in the prior-year period. The substantial turnaround is primarily attributed to a $133.8 million non-cash asset impairment charge recorded in 2023. That charge was largely linked to long-lived assets in the company’s Mann Packing operations and goodwill in its prepared foods reporting unit, significantly impacting results from the previous year.
Adjusted operating income for the quarter was $17.1 million, up from $12.0 million in the prior-year period. Adjusted figures exclude the previously mentioned $0.2 million in other product-related charges, along with $2.9 million in asset impairments and other charges primarily related to housing damage at farms in Costa Rica and goodwill impairments within the vegetable reporting unit. Additionally, the company reported a $16.3 million gain on asset sales, primarily stemming from the sale of a Canadian distribution center and certain assets of Fresh Leaf Farms in North America.
Fresh Del Monte Produce’s net income (FDP net income) for the fourth quarter was $20.4 million, a sharp contrast to the net loss of $106.4 million in the prior-year period. Adjusted FDP net income stood at $12.3 million, compared with $11.8 million in the previous year.
Full Fiscal Year 2024 Financial Highlights
For the full fiscal year 2024, Fresh Del Monte Produce reported net sales of $4,280.2 million, a slight decrease from $4,320.7 million in the prior-year period. This decline was largely driven by lower sales volumes and per-unit selling prices in the banana segment, along with unfavorable exchange rate fluctuations, particularly against the Japanese yen and Korean won. These decreases were partially counterbalanced by higher per-unit selling prices and increased sales volumes in the fresh and value-added products segment.
The company’s gross profit for the full year reached $357.9 million, up from $350.7 million in 2023. The increase was mainly fueled by higher net sales in the fresh and value-added products segment and lower ocean freight costs. However, this was partially offset by reduced sales in the banana segment, higher production and procurement costs, and exchange rate fluctuations, primarily related to the Costa Rican colon and Japanese yen.
Adjusted gross profit for the full fiscal year was $358.9 million, compared to $354.5 million in the prior-year period. The adjusted figure excludes $1.0 million in other product-related charges, primarily consisting of $1.2 million in severance costs associated with outsourcing functions within the fresh and value-added operations segment, along with $1.0 million in additional logistics costs and inventory write-offs caused by Hurricane Beryl in July 2024. These were partially offset by a $1.7 million insurance recovery related to severe flooding in Greece from 2023. In comparison, the prior-year period’s adjusted gross profit excluded $3.8 million in product-related charges, including $1.5 million in inventory write-offs tied to the sale of two distribution centers in Saudi Arabia, $1.4 million in write-offs and cleanup costs following Greece’s flooding, and $0.6 million in inventory write-offs linked to shipment rerouting due to the Red Sea conflict.
Operating income for the full fiscal year 2024 surged to $196.3 million, significantly higher than the $58.5 million recorded in 2023. The improvement was largely driven by reduced asset impairment charges and higher gross profit, though partially offset by an increase in selling, general, and administrative expenses.
Adjusted operating income for the year came in at $158.6 million, compared with $165.3 million in the prior year. Excluding other product-related charges, asset impairments, and gains on asset sales, the decline in adjusted operating income was mainly due to higher selling, general, and administrative expenses.
For the full fiscal year 2024, Fresh Del Monte’s net income (FDP net income) totaled $142.2 million, a remarkable turnaround from the net loss of $11.4 million in 2023. Adjusted FDP net income stood at $116.2 million, compared with $101.7 million in the prior year.
