Pretax profit at Total Produce falls 3.7% in 2018

Fruit and vegetable group acquired ‘transformational’ stake in Dole last year

Davy noted challenging conditions in Total Produce’s Netherlands market, although this was offset by a good performance in southern Europe. Photograph: Getty Images

Davy noted challenging conditions in Total Produce’s Netherlands market, although this was offset by a good performance in southern Europe. Photograph: Getty Images

 

Pretax profit at fruit and vegetable producer Total Produce dropped by 3.7 per cent to €69.8 million in 2018 as adverse weather hit its European business.

Excluding the impact of its acquisition of Dole in the United States, the company made an adjusted pretax profit of €80.7 million for the year. Total Produce bought a 45 per cent stake in Dole – one of the largest fresh produce companies in the world – in 2018 as part of a $300 million deal in what was billed as a “transformational change” for the company. The transaction completed on July 31st, 2018 after the European Commission gave it the go ahead and the first full year including the Dole results will be 2019.

Total revenue at Total Produce was 17.7 per cent higher at €5.04 billion. Dole’s contribution to revenue was €692 million. Dole’s business is seasonal, with its earnings weighted towards the first half of the financial year. Excluding Dole, that figure was €4.35 billion, up 1.6 per cent.

Adjusted earnings before interest, tax, depreciation and amortisation was €133 million, up 27.6 per cent on the previous year. Discounting the impact of the Dole acquisition, Earnings before interest, taxes, depreciation, and amortization was €110.4 million, an increase of 5.7 per cent.

Adjusted fully diluted earnings per share, which included Dole and the related share placing, was 10.51 cent. Excluding Dole, the figure was 13.5 cent, a marginal rise when the impact of currency movements was included.

Trading update

Total Produce chairman Carl McCann said the company had delivered continuing good results in a more challenging year.

“Trading in early 2019 has been satisfactory,” he said. “ Total Produce is targeting an increase in the 2019 adjusted fully diluted earnings per share, including Dole, in the mid-to-upper single digit range over the 2018 adjusted earnings per share of 13.50 cent.”

Davy noted challenging conditions in Total Produce’s Netherlands market, although this was offset by a good performance in southern Europe. Marginally lower volumes were offset by higher prices, said Davy.

Dole has had its obstacles in recent months, with its fresh vegetables section hit by industry-wide safety notices linked to Romaine lettuce.

The proposed total dividend for the group was 2.5 per cent higher at 2.5140 cent per share.Shares in Total Produce were trading 0.8 per cent higher at €1.825 in Dublin on Thursday afternoon.