Total Produce shares decline on Dole Food trading update
Shares in Total Produce were down 1.3pc in afternoon trading yesterday after it announced a decline of $5m (€4.37m) in the quarterly earnings at US-based Dole Food.
Earlier this year Total Produce agreed to the acquisition of 45pc of Dole for $300m (€262m).
Dole reported earnings before interest, taxation, depreciation and amortisation (ebitda) of $45.4m (€40m) for the three months to October 6.
This is a decline on the $50.1m (€44m) ebitda reported for the same period in 2017.
The year-on-year drop in earnings reflected a $7.4m (€6.47m) ebitda reduction in its fresh vegetables segment, which had been impacted by an industry-wide safety notice linked to romaine lettuce - and not directly linked to Dole - as well as oversupply that resulted in lower pricing.
Meanwhile, Dole's fresh fruit segment performed "strongly" during the period.
During the three months Dole, which was founded in 1851, sold its corporate headquarters for $50m (€43.7m), with an associated gain of $7.3m (€6.38m). This was not included in the ebitda.
Commenting on the update, analysts at Davy stockbrokers said that, in the absence of explicit changes to company guidance, it would maintain its financial year 2018 forecasts for Total.
A spin-out from Fyffes, and chaired by Carl McCann, Total first unveiled the acquisition of a 45pc slice of Dole, one of the world's top producers of bananas and pineapples, in February.
It has the option to fully acquire Dole in five years.
Total and Dole's owner, 95-year-old billionaire David H Murdock, will run the company as a joint venture.