E.Coli scare hits earnings at Total Produce

TOTAL PRODUCE said earnings per share grew 2 per cent in the first six months of the year, despite difficult trading conditions in some of its European markets as a result of the E.coli scare that hit Europe in the summer.

The fruit and vegetable distribution company said earnings per share were 4.20 cent for the period ended June 30th, while revenue was unchanged at €1.3 billion. Adjusted earnings before interest, taxation, and amortisation fell by €900,000 or 3.5 per cent to €26.2 million.

The group’s core fresh produce division rose slightly compared with the prior period, and adjusted EBITA fell €1 million to €27.7 million. Revenue was lifted by favourable foreign exchange movements.

Analysts noted that the E.coli outbreak cost the company about €1.5 million in costs incurred and lost revenue, and could cost a similar amount in the second half of the year.

The outbreak, which began in May, infected more than 4,000 people, and was eventually traced to bean sprouts from an organic farm in north Germany.

However, Russia only lifted a ban on raw vegetables from all European Union countries in early August.

The company also incurred reorganisation costs during the period amounting to €1.2 million in Scandinavia and the UK.

Revenue in the company’s consumer goods and health foods distribution division fell by 4 per cent, with adjusted EBITA down €100,000 compared with the same period a year earlier.

Chairman Carl McCann described the performance as “solid”.

“Based on current trading conditions the group continues to target adjusted earnings per share in the range of 6.5 cent to 7.5 cent per share for the full year,” he said.

Fruit importer Fyffes, from which Total Produce was spun-off,reported pre-tax profits of €17.3 million for the first six months of 2011, up 30.4 per cent compared to €13.3 million for the same period a year earlier.