2008 earnings of fruit group Fyffes on track

FRUIT GROUP Fyffes said yesterday that earnings would be affected by the strengthening of the dollar and further cost inflation this year, but said its 2008 earnings were on track.

"There has been a significant adverse movement in exchange rates in recent months as a result of the strengthening of the US dollar, particularly relative to sterling. The group expects further cost inflation in 2009 with higher fruit and shipping costs only partly offset by lower fuel costs," the company said in a trading update to investors.

Fyffes is seeking increases in selling prices in all key markets, after a disappointing autumn for fruit prices prompted a profit warning last August.

The company said it expected to secure adjusted earnings before interest and tax in the order of €15 million for 2008, which is at the upper end of the €12-€15 million range indicated in the August trading update.

Fyffes said it was targeting earnings of €14-€18 million for 2009, based on the expectation that it will achieve the "necessary" increases in average selling prices.

Goodbody Stockbrokers upgraded its earnings per share forecasts by 16 per cent to 3.6 cent for 2008 and by 29 per cent to 4 cent for 2009.

NCB Stockbrokers said it would adjust its earnings estimates following the update, but added that it was "cautious" about the group's prospects for 2009.

Fyffes shares closed down 1.7 per cent yesterday at 28 cent.