Strategy Change For Chiquita
Published on Aug 8 2012 11:17 AM in Fresh Produce
Chiquita released its second quarter results yesterday, revealing a 4 per cent drop in sales for the period. The company also announced a restructuring strategy to increase profitability in its core business, which will see the departure of CEO Fernando Aguirre.
The company's net income for the second quarter dropped to $6 million from $78 million in last year's the comparable period. Lower revenues and higher sourcing costs were attributed as the reasons for the fall, but this was partially offset by lower marketing expenses and a reduction in manufacturing quality costs in the group's salads segment, said Chiquita.
Total sales fell by 4 per cent year-on-year to $833 million, which the US company says is mostly due to lower pricing in bananas and a decrease in the value of the euro against the dollar. Sales in the company's primary bananas business decreased 4 per cent to $533 million in the second quarter.
The restructuring programme being initiated by the company aims to save $60 million annually. Chiquita stated that the majority of savings will come from the "simplification and reduction of the company's overhead and operating structure". Some senior management positions will be cut in order to "bring operational functions closer in-line with strategic decisions" so the company can be more cost efficient and competitive, it was said yesterday. Chief executive Aguirre is to step down once a successor has been found, ending his nine-year stint with the business. (8 Aug)
© 2012 - ESM: European Supermarket Magazine