Chiquita struggles on after Q1 loss

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Leading banana supplier Chiquita has reported a $3m loss for its first quarter, hit by increased industry costs, unfavorable pricing and an exit from unprofitable business in Chile.

Announced last week, the results for the quarter ended March 31 2007 reveal the firm's continuing difficulties after more than a year in a challenging operating environment.

But according to chairman and chief executive officer Fernando Aguirre, Chiquita has made progress in its "strategy to return to profitable, sustainable growth."

The firm plans to focus on increasing its financial flexibility, simplifying its business model and developing branded, innovative products to increase market share.

"Overall, while we have faced several obstacles in recent quarters, I am confident that Chiquita is on the right path, and we saw tangible signs of progress in the first quarter. We remain committed to deliver sustainable, profitable growth, and we expect 2007 to be a positive step in reaching those goals," said Aguirre.

Total net sales for the quarter increased by 3 percent to $1.2bn, boosted by an 8 percent increase in banana sales. But profit for the firm's banana segment was hit by higher industry costs, such as purchased fruit, ship charters and fuel, as well as higher European banana tariffs and lower European banana pricing. Operating income for the segment was down 11 percent from last year, to $33m.

The company claimed it made progress in its European banana business by growing volume and maintaining its premium market position and profitability, despite last year's regulatory changes, which imposed higher tariffs on imported bananas.

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