Total Produce profits rise almost 20% despite Europe volume hit

A 19.4 per cent profit boost at Total Produce led the group to increase its shareholder dividend on Thursday despite volumes in its European business taking a hit.

The fruit and vegetable producer said profit before tax rose to €42.3 million on the back of an almost 2 per cent growth in revenue to €2.18 billion. In its half-yearly results for the six months to the end of June, the board announced a 2.5 per cent increase in the company’s interim dividend to €0.9129 cent per share.

But volumes in Europe suffered in the period, negatively affected by "unusual weather patterns" which impacted "supply and demand dynamics". Total revenues in the euro zone dropped 3.2 per cent to €874 million although a strong performance in southern Europe offset some of the decline.

In the group's business in the Czech Republic, Poland, Scandinavia and the UK, revenue fell 2.4 per cent to €781 million, principally due to adverse currency movements caused by the weakening of the Swedish Krona and Sterling.

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However, the European dip was offset by an 18 per cent revenue increase across Total Produce's North America and India businesses. Although the company saw price decreases in some product categories including berries and soft fruits, revenue increased to €556 million in this geographical segment of the business.

Transformative transaction

After the half-yearly results, Total Produce completed the $300 million (€257 million) deal to acquire a 45 per cent stake in Dole Foods – one of the largest fresh produce companies in the world.

“The 2019 financial year will be the first full year reflecting the scale of this transformative transaction,” said group chairman Carl McCann. “The conclusion of the Dole transaction represents a very significant development in the Group’s successful expansion strategy.”

Adjusted earnings at Total Produce rose 7.4 per cent to €56.7 million in the period, benefitting from the “incremental contribution of acquisitions” in the past 18 months.

During the six-month period the group made a series of acquisitions with committed investment of €2.8 million. In January, it completed two new facilities, one in Copenhagen, Denmark, and one in its exotic business in the Netherlands which specialises in the ripening of avocados.

In July, a group subsidiary disposed of an interest in a farming entity for a gain estimated to exceed €15 million.

Total Produce’s net debt rose to €173.7 million compared to €153.3 million at the same period last year.