Fyffes sets earnings target of €22m

FRUIT GROUP Fyffes issued an upbeat trading statement yesterday, despite the negative impact of “exceptionally cold” weather throughout Europe in the final month of the year.

The Irish banana importer said it was seeking earnings before tax and write-offs of €17-€22 million in 2010. The target is based on an expectation that it will achieve increases in average selling prices across all its markets.

The group said it would “continue to pursue higher selling prices” in 2010. These will be required to offset increases in input prices.

The cold start to 2010 in Europe is having an “adverse impact on current trading in the early weeks of the year”, the company added.

Fyffes said it expected its earnings in 2009 to be in the order of €20-€21 million – towards the upper end of guidance to the market. In September, Fyffes indicated to investors that adjusted earnings would be in the range €18-€22 million for the full year.

“Trading conditions were difficult towards the end of the year due to the adverse impact of the exceptionally cold weather throughout Europe in December,” Fyffes said.

Adjusted earnings of €20-€21 million will mark an increase on the previous year’s earnings of €15.3 million. Net cash at the end of 2009 is expected to stand at around €37 million.

The earnings expectations and targets exclude Fyffes’s 40 per cent share of the results of property group Blackrock International Land, depreciation effects and one-off items.

Fyffes stands to be one of the prime beneficiaries of a deal struck late last year to end a long-running trade dispute about banana tariffs. Negotiators from the EU struck a deal with Latin American, African and Caribbean producers of the fruit to lower the tariff the EU imposes on banana imports.