Dublin-headquartered fruit and veg giant Dole said gross profit rose in the first three months of the year, lifted by increased revenue and robust demand driven by health and wellness trends.
However, it warned that the conflict in the Middle East could feed through to higher costs in the second quarter.
The company said it has a “solid” start to the year, with revenue rising 11.6 per cent to $2.4 billion (€2 billion) as consumers tapped into broader health trends, dietary preferences evolved and the adoption of GLP-1 weight loss drugs continued.
But it warned that higher shipping and fuel costs could come in the second quarter as a result of the conflict in the Middle East, with its fresh fruit business expected to be particularly affected.
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New-York-listed Dole was formed in 2021 through the merger of Dublin-based Fyffes spin-out Total Produce and Dole Food Company.
Net income for the three-month period was $37.7 million, down from from $44.2 million a year earlier, with lower operating income and higher tax charges playing a role.
Adjusted earnings before interest, tax, depreciation and amortisation (ebitda) totalled $100.3 million. Diluted earnings per share were $0.33.
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Dole’s fresh fruit division stumbled. Although revenue increased almost 7 per cent during the first quarter, which Dole attributed to higher worldwide pricing of bananas, pineapples and plantains and higher volumes of bananas sold in Europe, adjusted ebitda declined 17 per cent. That was due to higher overall sourcing costs and foreign exchange impact.
That weakness was partially offset by a stronger performance in its diversified fresh produce divisions, which saw earnings rise for both Europe Middle East and Africa (EMEA) and the Americas and the rest of world business units. This was driven by favourable impact from foreign currency translation across the EMEA unit, along with underlying growth in France, Germany. In the Americas and the Rest of World unit, higher volumes and positive pricing fuelled growth.
Executive chairman Carl McCann said the company was pleased with the start to the year.
“Robust consumer demand in our key markets is driving revenue growth and contributing to positive momentum across the group,” he said.
“While we are experiencing complexity in the operating environment due to the ongoing conflict in the Middle East, we believe the strength of our broad and resilient business model positions us well to manage these evolving conditions.”
Looking ahead, the company said it was aiming for full-year adjusted ebitda (earnings before interest, taxes, depreciation, and amortisation) of $400 million. Evolving conditions in the Middle East, however, would mean a more complex operating environment that would directly impact its cost base.
“However, as the year progresses, we expect to see the benefit of contract price adjustments, as well as the benefit of our dynamic pricing strategy in our diversified divisions, coming through,” Dole said.
In a note, analysts at Davy said they envisaged “limited changes to our current forecasts” at this stage.
Following the end of the period, Dole received regulatory approval for the sale of its port in Ecuador, a deal that is expected to complete before the end the second quarter.
