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Fresh Del Monte Produce Inc. Reports Operating Results (10-K)

March 01, 2011 | About:
10qk

10qk

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Fresh Del Monte Produce Inc. (FDP) filed Annual Report for the period ended 2010-12-31.

Fresh Del Monte Produce has a market cap of $1.7 billion; its shares were traded at around $28.58 with a P/E ratio of 14 and P/S ratio of 0.5. The dividend yield of Fresh Del Monte Produce stocks is 0.7%.Hedge Fund Gurus that owns FDP: Joel Greenblatt of Gotham Capital. Mutual Fund and Other Gurus that owns FDP: Charles Brandes of Brandes Investment.

Highlight of Business Operations:

The aggregate market value of Ordinary Shares held by non-affiliates at July 2, 2010, the last business day of the registrant s most recently completed second quarter, and was $802,352,679 based on the number of shares held by non-affiliates of the registrant and the reported closing price of Ordinary Shares on July 2, 2010 of $19.94. The registrant does not have non-voting common stock outstanding.

On June 6, 2008, we acquired all of the shares of Desarollo Agroindustrial de Frutales, S.A., a producer of high-quality bananas in Costa Rica; all of the shares of Frutas de Exportacion, S.A., a major producer of gold pineapples in Costa Rica; and all of the shares of an affiliated sales and marketing company, collectively known as “Caribana”. The purchase price for Caribana was $405.9 million plus $2.9 million for acquisition-related expenses, financed with $88.5 million in cash on hand and drawings under our then-existing syndicated revolving credit facility. As a result of this acquisition, our land holdings in Costa Rica increased by approximately 13,000 hectares of quality farm land producing approximately 13 million boxes of bananas and 11 million boxes of gold pineapples annually. We also acquired state-of-the-art packing facilities, as well as modern farming equipment. Caribana s extensive production area substantially increased our presence in the banana market and further strengthened our number one position in the gold pineapple market. The close proximity of Caribana s production and packing operations to our existing farms has provided significant operating efficiencies and synergies. This transaction has enabled us to continue to capitalize on the growing global demand for fresh produce and to expand our reach into existing and new markets.

On June 27, 2008, we acquired certain operating assets, excluding land, of Melones de Costa Rica, S.A. (“MCR”). MCR is a 50%-owned unconsolidated subsidiary that produced melons for us in Costa Rica. MCR continues to own the land that is leased to us on a long-term basis. The purchase price was $8.0 million. During the third quarter of 2008, we also acquired two additional melon operations in Guatemala. The assets acquired comprised principally farming equipment, packing sheds and materials and supplies inventory. The purchase price was $13.9 million.

Our capital expenditures totaled $70.8 million in 2010, consisting of approximately $31.0 million, principally for expansion of production facilities in Guatemala, Costa Rica and Brazil combined with improvements to our port facilities in North America and distribution facilities in Saudi Arabia related to the banana segment. We also spent approximately $33.1 million principally for expansion of production facilities in Costa Rica, Guatemala, Chile and the Philippines and fresh-cut facilities in the United States and the United Kingdom related to the other fresh produce segment and $6.7 million principally for expansion of production facilities in Kenya, Greece and Jordan related to the prepared food segment. Our capital expenditures totaled $84.5 million in 2009, consisting of approximately $51.4 million primarily for distribution centers in Saudi Arabia and for expansion of production facilities in Costa Rica, Guatemala, Brazil and the Philippines related to the banana segment, $27.8 million principally for expansion of our pineapple operations in Costa Rica and the Philippines, expansion of non-tropical fruit operations in Chile and expansion of fresh-cut fruit facilities in North America and the United Kingdom related to the other fresh produce segment and $5.3 million for expansion of production facilities in Jordan and Kenya related to the prepared food segment. Our capital expenditures totaled $101.5 million in 2008, consisting of $59.4 million principally for distribution centers in Saudi Arabia and South Korea and for expansion of production facilities in the Philippines, Guatemala and Brazil related to the banana segment, $23.1 million principally for expansion of production facilities in Costa Rica, the Philippines and Chile related to the other fresh produce segment and $19.0 million principally for production facilities in Jordan and Kenya related to the prepared food segment. The principal capital expenditures planned for 2011 consist primarily of the expansion of production facilities in Costa Rica, Guatemala, Chile, Kenya, Jordan and Greece and for our distribution and fresh-cut facilities in Saudi Arabia, North America and the United Kingdom.

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