DUBLIN-BASED FRUIT distributor Fyffes has reported strong growth in profitability for the first half of 2009, and has upgraded its full-year earnings forecast for a second time.

Total revenues at Fyffes remained steady from the same period last year at €400 million, but adjusted profit before tax rose almost 19 per cent year-on-year to €18.6 million (excluding the group’s share of losses at Blackrock International).

A 20 per cent increase in input costs in the first six months of the year was offset by lower fuel prices, currency hedging and favourable market conditions.

The group, which describes itself as the world’s oldest fruit brand, has raised its earnings estimate for the full year to between €18 million to €22 million. This is 25 per cent above the initial guidance given in the spring, and 11 per cent higher than its most recent guidance in July.

Yesterday’s upgrade was attributed to stronger-than-anticipated trading conditions in continental Europe.

First-half profits from the group’s banana activities were €2.9 million higher than in the first half of 2008, as increased banana selling prices offset higher industry costs.

Fyffes said it would have to continue pushing up prices in all markets to counteract cost inflation and unfavourable exchange rates.

The group’s revenue was hit by difficult conditions in the pineapple market and the cessation of its Brazilian winter melon business.

The group’s cash position strengthened considerably over the first half, with its net cash balance growing by €8.2 million to €40.4 million. Its interim dividend is 10 per cent higher year-on-year at 55 cent.

The deficit in the group’s defined benefit pension schemes rose from €10 million at the start of the year to €17.5 million by the end of the first half.

In a statement yesterday, the group said that this movement included an €8.3 million actuarial loss arising from “a more conservative assumption in relation to the future rate of inflation in the UK, amongst other things”.

The stock lost one cent on the Dublin market yesterday to finish at 45 cent.