CINCINNATI – March 20, 2007 – Chiquita Brands International, Inc. (NYSE: CQB) today provided an intraquarter update for the first quarter 2007, including Chiquita banana and Fresh Express value-added salad prices and volumes for January-February 2007 in its Banana and Fresh Cut segments, respectively.
Banana Segment:
Year-over-Year Percentage Change 1 January-February 2007 vs. January-February 2006
1 These statistics may not be indicative of future results. 2 The company’s “core” European markets include the member states of the European Union (except new entrants Romania and Bulgaria, which continue to be reported in “trading” markets), Switzerland, Norway and Iceland. 3 Prices on a U.S. dollar basis do not include the impact of hedging. 4 In this region, the company primarily operates through joint ventures, and most business is invoiced in U.S. dollars.
Banana prices in the company’s core European markets were down 2 percent year-on-year on a local currency basis (up 6 percent on a U.S. dollar basis), reflecting the continued impact of E.U. regulatory changes implemented on Jan. 1, 2006, which have resulted in an increase in industry volume and price competition. The company noted that local pricing in the AC-10 countries of Central and Eastern Europe was particularly affected by pressure from hard discounters at the low end of the price spectrum, while local pricing for premium-quality fruit in the traditional EU-15 countries was essentially flat year-over-year. The company’s volume sold in its core European markets increased by 4 percent, due to the company’s ability to maintain its position as the leading supplier in these markets as well as recovery from weather-related disruptions in late 2005 that had impacted supply in the first half of 2006.
North American banana pricing continued its positive trend, albeit at a modest year-over-year rate. While base contract prices increased, this improvement was partially offset by lower spot-market pricing and lower year-on-year surcharges linked to a third-party fuel price index. Banana volume sold in the region rose 9 percent, reflecting distribution gains at several top-25 customers as well as the company’s recovery from weather-related disruptions in the previous year.
In Asia Pacific and the Middle East, pricing rose 6 percent year-on-year on a U.S. dollar basis, primarily as a result of significant improvement in local pricing in Japan, partially offset by unfavorable dollar-yen exchange rates. Volume in this region fell by 9 percent year-over-year, primarily related to unfavorable weather conditions in the Philippines, which resulted in lower yields of premium-quality fruit.
In the company’s trading markets, which consist primarily of European and Mediterranean countries that do not belong to the European Union, the increase in volume was driven by growth in Turkey, where the company has established a year-round service commitment in 2007.
Fresh Cut Segment:
Year-over-Year Percentage Change1 January-February 2007 vs. January-February 2006
1 These statistics may not be indicative of future results.
In the Fresh Cut segment, total volume of retail value-added salads was flat year-over-year in the two-month period. Although January volumes rose 2 percent year-over-year, record freezing temperatures in growing regions earlier this year limited the supply of raw product, and as a result the industry as a whole experienced a decline in volume in February. In addition, since mid-September, the company’s Fresh Express operations have been impacted by consumer concerns regarding the safety of fresh spinach and other packaged leafy greens in the United States, despite the fact that no confirmed cases of consumer illness were linked by the U.S. Food and Drug Administration to Fresh Express products. Net revenue per case declined by 3 percent year-over-year due to increased promotion activity designed to stimulate consumer confidence in the category.
About Chiquita Brands International, Inc.
With annual revenues of approximately $4.5 billion, Chiquita Brands International, Inc. (NYSE: CQB) is a leading international marketer and distributor of high-quality fresh and value-added food products – from energy-rich bananas and other fruits to nutritious blends of convenient green salads. The company’s products and services are designed to win the hearts and smiles of the world's consumers by helping them enjoy healthy fresh foods. The company markets its products under the Chiquita® and Fresh Express® premium brands and other related trademarks. Chiquita employs approximately 25,000 people operating in more than 70 countries worldwide. For more information, please visit our web site at www.chiquita.com.
This press release contains certain statements that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of Chiquita, including the impact of the 2006 conversion to a tariff-only banana import regime in the European Union; unusual weather conditions; industry and competitive conditions; financing; product recalls affecting the industry; the customary risks experienced by global food companies, such as the impact of product and commodity prices, food safety, currency exchange rate fluctuations, government regulations, labor relations, taxes, crop risks, political instability and terrorism; and the outcome of pending governmental investigations and claims involving the company.
Any forward-looking statements made in this press release speak as of the date made and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements, and the company undertakes no obligation to update any such statements. Additional information on factors that could influence Chiquita's financial results is included in its SEC filings, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
FOR FURTHER INFORMATION, PLEASE CONTACT: Michael Mitchell, 513-784-8959, mmitchell@chiquita.com
