Fyffes seeks increase in selling prices
Currency pressures and a fall off in third quarter sales in 2008 for Fyffes has the fruit giant searching for extra cash
11 February 2009
Fruit group Fyffes has said that while 2008 earnings were on track, this year’s earnings will be affected by the dollar’s rising value and further cost inflation.
Fyffes wants to increase selling prices in all key markets, following a disappointing autumn for fruit prices and a subsequent profit warning last August.
In a trading update to investors, the company said: “There has been a significant adverse movement in exchange rates in recent months as a result of the strengthening of the US dollar, particularly relative to sterling. The group expects further cost inflation in 2009 with higher fruit and shipping costs only partly offset by lower fuel costs.”
The group said it expected adjusted earnings before interest and tax of approximately €15 million for 2008, which is at the upper end of the €12 to €15 million range indicated in the August trading update.
For 2009 meanwhile, Fyffes said it was targeting earnings of between €14 and €18 million, if it could achieve the "necessary" increases in average selling prices.
However when asked how significant these price increases would be, a spokesperson responded that the group could not elaborate as, “under stock exchange rules, they are now in a closed trading period until their results are published in March.”