Fruit distribution giant Fyffes posts €20.7m profit for 2021

Irish fruit distribution giant Fyffes surged back into the black last year, posting a €20.7m profit and reversing a €170m loss it posted the previous year during the height of the Covid pandemic as it shouldered significant impairments.

yffes, which is one of the world’s largest distributors of fresh produce, is owned by Japanese conglomerate Sumitomo.

Accounts just filed for Fyffes note that its performance “improved significantly” in 2021, as the worst effects of the pandemic eased.

The company said its activity in 2020 had been hit hard. It added that the effect on its US melon business that year was particularly pronounced, as the pandemic coincided with a key part of the import season, when production volumes could not be adjusted to align with reduced demand.

It said that resulted in “significant levels of fruit dumping in both the production regions and the US”.

Fyffes said its 2020 results were also impacted by large impairment charges driven by lower projected medium-term earnings across the group, which impacted its assessment of the carrying value of goodwill and intangible assets for a number of the group’s more recent acquisitions. No additional impairments were required in 2021.

The group, headed by CEO Helge Sparsoe, added that 2021 saw a return to profitability in its melon product line as well as increased revenue and profitability in its core banana category.

The accounts show that revenue last year was stable at €1.47bn compared with €1.49bn in 2020.

However, its gross profit jumped to €189m from €117m.

Directors’ remuneration fell to €3.6m last year from €11.1m a year earlier. The 2020 pay included €7.5m that was split between former executive chairman David McCann and ex-finance director Tom Murphy when they left the group that year.

Sumitomo agreed in late 2016 to pay €751m to buy Fyffes, which was listed on the stock market.

The deal came two years after a planned $1bn merger between Chiquita and Fyffes was derailed after the Cutrale and Safra groups barged in on the deal, instead buying Chiquita for nearly $700m.

At the time of the Sumitomo deal, the McCann family owned nearly 12pc of Fyffes and reaped €87m from the sale.

David McCann told the Irish Independent at the time that Fyffes did not believe it needed the sale in order to continue to compete on a global stage that has seen consolidation.

“Absolutely not,” he said. “We weren’t up for sale. We received an approach and it’s a transaction that is commercially compelling and also sensible in terms of what it means for the people and the company itself.”

He added: “That all sounds a bit cliched, but it’s the way we feel about this. They seem to be good people and they seem to think the same as we do.”

Earlier this year, Fyffes officially opened a new €25m banana and ripening distribution centre in Balbriggan, Co Dublin.

At full capacity the centre delivers more than seven million bananas every week, or more than 60,000 tonnes a year, for Irish retailers, wholesalers and other food providers.

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