Q2 2024 Fresh Del Monte Produce Inc Earnings Call
Good day and welcome to the Fresh Del Monte's Produce 2nd Quarter 2024 Earnings Conference Call.
Operator: 2nd quarter, 2024 earnings conference call. Today's conference call is being broadcast live over the internet and is also being recorded for playback purposes. All lines have been placed on mute to prevent any background noise.
Speaker Change: Today's conference call is being broadcast live over the internet and is also being recorded for playback purposes. All lines have been placed on mute to prevent any background noise.
Operator: After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, again, press star and one.
Speaker Change: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again press star and 1.
Christine Cannella: For opening remarks and introductions, I would like to turn today's call over to Vice President Investor Relations with Fresh Del Monte Produce, Ms. Christine Cannella. Please go ahead, Ms. Cannella.
Speaker Change: For opening remarks and introductions, I would like to turn today's call over to Vice President Investor Relations with Fresh Del Monte Produce, Ms. Christine Cannelli. Please go ahead, Ms. Cannelli.
Operator: Thank you, Kayla. Good afternoon, everyone, and thank you for joining our second quarter 2024 conference call. Joining me today in today's discussion are Mr. Mohammad Abu Ghazali, Chairman and Chief Executive Officer, and Ms. Monica Vicente, Senior Vice President and Chief Financial Officer. I hope that you had a chance to review the press release that was issued earlier by BusinessWire. You may also visit the company's IR website at InvestorRelations. FreshDelMonte.com to access today's earnings material and to register for future distributions.
Christine Cannella: Thank you, Cannella.
Operator: Thank you, Kayla.
Christine Cannella: Good afternoon, everyone. And thank you for joining our 2nd quarter 2024 conference call. Joining me today in today's discussion are Mr. Mohammad Abu Ghazali, Chairman and Chief Executive Officer, and Ms. Monica Vicente, Senior Vice President and Chief Financial Officer. I hope that you had a chance to review the press release that was issued earlier by a Business Wire. You may also visit the company's IR website at investorrelations.freshdomonti.com to access today's earnings material and to register for future distribution. This conference call is being broadcast live on our website and will be available for replay after this call.
Christine Cannelli: Thank you, Kayla. Good afternoon, everyone, and thank you for joining our second quarter 2024 conference call. Joining me today in today's discussion are Mr. Mohammad Abu Ghazali, Chairman and Chief Executive Officer, and Ms. Monica Vicente, Senior Vice President and Chief Financial Officer.
Speaker Change: I hope that you had a chance to review the press release that was issued earlier by Business Wire.
Speaker Change: You may also visit the company's IR website at InvestorRelations.FreshDelMonte.com to access today's earnings material and to register for future distributions.
Speaker Change: This conference call is being webcast live on our website and will be available for replay after this call.
Christine Cannella: Please note that our press release and our call today include non-GAAP measures. Reconciliation of these non-GAAP financial measures are set forth in the press release and earnings presentation, which is available on our website.
Speaker Change: Please note that our press release and our call today include non-GAAP measures. Reconciliations of these non-GAAP financial measures are set forth in the press release and earnings presentation, which is available on our website.
Christine Cannella: I would like to remind you that much of the information we will be speaking to today, including the answers we give in response to your questions, may include forward-looking statements within the safe harbor provisions of the Federal Securities Laws. In today's press release and in our SEC filing, we detail risks that may cause our future results to differ materially from these forward-looking statements. Our statements are as of today, August 1st, and we have no obligation to update any forward-looking statements we may make.
Operator: I would like to remind you that much of the information we will be speaking about today, including the answers we give in response to your questions, may include forward-looking statements within the safe harbor provisions of the Federal Securities Law. In today's press release and in our SEC filings, we detail risks that may cause our future results to differ materially from these forward-looking statements. Our statements are as of today, August 1st, and we have no obligation to update any forward-looking statements we may make. With that, I will turn today's call over to Mr. Mohammad Abu Ghazali. Please go ahead.
Speaker Change: I would like to remind you that much of the information we will be speaking to today, including the answers we give in response to your questions, may include forward-looking statements within the safe harbor provisions of the federal securities law.
Speaker Change: In today's press release and in our SEC filings, we detail risks that may cause our future results to differ materially from these forward-looking statements.
Speaker Change: Our statements are as of today, August 1st, and we have no obligation to update any forward-looking statements we may make.
Christine Cannella: During the call, we will provide a business update along with an overview of our 2nd quarter, 2020-24 financial results, followed by a question-and-answer session.
Speaker Change: During the call, we will provide a business update along with an overview of our second quarter 2024 financial results, followed by a question and answer session.
Mohammad Abu Ghazali: With that, I will turn today's call over to Mr. Muhammad Abu Ghizali. Please go ahead.
Speaker Change: With that, I will turn today's call over to Mr. Mohammad Abu Ghazali. Please go ahead.
Mohammad Abu Ghazali: Thank you, Ms. Christine, and thank you for joining us for our second quarter of 2020 earnings results. Overall, we are pleased with our performance this quarter. Gross margin for this segment was 11.2%, with net sales up $17 million in comparison to the same quarter last year. As one of the global leaders in pineapple,
Mohammad Abu Ghazali: Thank you, Mr. Christine, and thank you for joining us for our 2nd quarter, 2020-24 financial results. Overall, we are pleased with our performance this quarter, especially in our fresh and valued product segments, which includes our pineapples, fresh cup fruit, and abukados. For some time now, we have been saying that these higher margin categories, led by pineapples, are our strength and the foundation of our growth strategy. We are pleased to say that our company focus in these areas is yielding positive results. During the second quarter of 2024, we achieved significant margin improvements in the fresh and value added product segments.
Speaker Change: Thank you, Ms. Christine, and thank you for joining us for our second quarter 2020 for earning results.
Speaker Change: Overall, we are pleased with our performance this quarter.
Speaker Change: especially in our fresh and value-added product segment, which includes our pineapples, fresh cut fruit, and avocados.
Speaker Change: For some time now, we have been saying that these higher margin categories
Speaker Change: Led by pineapples are our strength and the foundation of our growth strategy.
Speaker Change: We are pleased to say that our company focus in this area is yielding positive results.
Speaker Change: during the second quarter of 2024.
Speaker Change: We achieved significant margin improvements in the fresh and value-added product segment.
Mohammad Abu Ghazali: Gross margin for the segment was 11.2% for the quarter versus 9.2% from the prior year period.
Speaker Change: Gross margin for the segment was 11.2%.
Speaker Change: for the quarter versus 9.2% from the prior year period.
Mohammad Abu Ghazali: We did not sales up $17 million in comparison to the same quarter last year. As one of the global readers in Pineapples, we continue to excel in this area and see increased demand for our new Pine Apples varieties. We have plans in place to continue growing production. Our pine apples volume growth projection over the next three years is at the compounded annual growth rate of 3%. Our strategy for our fresh and value added product segment continues to be top of mind. In Japan, we are optimizing our operations by consolidating two facilities into one. This strategic move aims to reduce operational cost and improve our margins.
Speaker Change: with net sales up $17 million in comparison to the same quarter last year.
Speaker Change: As one of the global leaders in pineapples, we continue to excel in this area and see increased demand for our new pineapple varieties.
Mohammad Abu Ghazali: We continue to excel in this area and see increased demand for our new pineapple variety. Our strategy for our fresh and value-added product segment continues to be top of mind in Japan. We are optimizing our operations by consolidating two facilities into one. This strategic move aims to reduce operational costs and improve our market. We are actively working to grow our business at this facility, and in North America; we continue to expand our reach with large key customers, and one we believe has a lot of potential. We started a test run with this product in November 2023.
Speaker Change: We have plans in place to continue growing production.
Speaker Change: Our pineapple volume growth projection over the next three years is at a compounded annual growth rate of 3%.
Speaker Change: Our strategy for our fresh and value-added product segment continues to be top of mind.
Speaker Change: in Japan.
Speaker Change: We are optimizing our operations by consolidating two facilities into one.
Speaker Change: This strategic move aims to reduce operational costs and improve our margins.
Mohammad Abu Ghazali: In Europe, we completed an expansion of our fresh capacity in the UK, which optimised our efficiency and improved our gross margin for this market in the second quarter by over 60% year over year. We are actively working to grow our business and this facility. In North America, we continue to expand our reach with large key customers. On average, we have seen business with five of our top front customers grow by more than 20% year-to-date versus last year. We also continue to expand our SKU list with recent innovations such as specialty fruits, desserts, and on-the-go oats.
Speaker Change: In Europe , we completed an expansion of our fresh cut facility in the UK.
Speaker Change: which optimized our efficiency and improved our gross margin for this market in the second quarter by over 60% year-over-year.
Speaker Change: We are actively working to grow our business at this facility, and in North America, we continue to expand our reach with large, key customers.
Speaker Change: On average, we have seen business with five of our top 20 customers grow by more than 20% year-to-date versus last year.
Speaker Change: We also continue to expand our FDU list.
Speaker Change: with recent innovations such as specialty fruits.
Speaker Change: Desserts and on-the-go oats.
Mohammad Abu Ghazali: Last quarter, we discussed our fresh guacamole. A product that fully leverages our vertical integration and one we believe has a lot of potential. We started a test run with this product in November 2023 with 640 units. Fast forward to today and we have sold more than 315,000 units in less than seven months. We expect that our unprecedented all natural fresh guacamole will now be available in nearly 3,000 stores nationwide by the end of the summer. A significant expansion in just a few months since its launch. As such, we continue to expand production to keep up with the demand for this product.
Speaker Change: Last quarter, we discussed our fresh guacamole.
Speaker Change: A product that fully leverages our vertical integration and one we believe has a lot of potential.
Speaker Change: We started a test run with this product in November 2023 with 640 units.
Mohammad Abu Ghazali: Fast forward to today, and we have sold more than 315,000 units in less than seven months. We expect that our unprecedented all-natural fresh guacamole, as one of the top avocado importers in the U.S., will be a huge success. We see significant opportunities for further expansion in this category. Building on our commitment to harness the full potential of our growing operation, we are actively working on ways to maximize the full utilization of our fruit residue. To this end, we recently opened a biofertilizer plant. This innovative facility transforms residues and byproducts from our pineapple processing operations into biofertilizers. This is part of our larger strategy to focus on high-margin products.
Speaker Change: Fast forward to today, and we have sold more than 315,000 units in less than seven months.
Speaker Change: We expect that our unprecedented, all-natural, fresh guacamole
Speaker Change: will now be available in nearly 3,000 stores nationwide by the end of the summer.
Speaker Change: A significant expansion in just a few months since its launch.
Speaker Change: As such, we continue to expand production to keep up with the demand for this product.
Mohammad Abu Ghazali: We are also pleased with our avocado program, which is showing remarkable potential. As one of the top avocado importers in the US, we see significant opportunities for further expansion in this category thanks to our robust infrastructure. Building our commitment to harness the full potential of our growing operations, we are actively working on ways to maximize the full utilization of our food residues. To this end, we recently opened a bio-fertilizers plant in our Kenya operations. This innovative facility transforms residues and byproducts from our prime-appled processing operations into bio-fertilizers. Initially, we plan to utilize this product within our Kenya operations and eventually make it available to other growers in East Africa with aspirations to see its benefits ripple across our global footprint.
Speaker Change: We are also pleased with our avocado program.
Speaker Change: which is showing remarkable potential.
Speaker Change: as one of the top avocado importers in the U.S.
Speaker Change: We see significant opportunities for further expansion in this category.
Speaker Change: Thanks to our robust infrastructure.
Speaker Change: Building on our commitment to harness the full potential of our growing operations.
Speaker Change: We are actively working on ways to maximize the full utilization of our fruit residues.
Speaker Change: To this end, we recently opened a biofertilizers plant in our Kenya operations.
Speaker Change: This innovative facility transforms residues and byproducts from our pineapple processing operations into biofertilizers.
Speaker Change: Initially, we plan to utilize this product within our Kenyan operations.
Speaker Change: and eventually make it available to other growers in East Africa with aspirations to see its benefits ripple across our global footprint.
Mohammad Abu Ghazali: This is part of our large strategy to focus on high-miser products.
Speaker Change: This is part of our large strategy to focus on high margin products.
Monica Vicente: With that, I will take it over to Money get to discuss our second quarter, 2024 results in detail. Thank you, Mr. Abu Ghazali, and good afternoon, everyone, and thank you for joining us on today's call. Let's start with our man-packing operations.
Speaker Change: With that, I will turn it over to Monica to discuss our second quarter 2024 results in detail.
Monica: Thank you, Mr. Abugazeli, and good afternoon, everyone, and thank you for joining us on today's call.
Monica Vicente: We remain actively engaged in exploring strategic alternatives to determine the best path forward for this business. Our commitment to thoroughly analyze all potential options continues. While we have not yet reached a definitive conclusion, our evaluation process is progressing, and our intent remains to make a decision in the near term. As previously stated, there can be no assurance that this process will result in a specific strategic outcome.
Monica: Let's start with our manpacking operations.
Speaker Change: We remain actively engaged in exploring strategic alternatives to determine the best path forward for this business.
Monica Vicente: Our commitment to thoroughly analyze all potential options continues. Net sales were $1,140,000,000, compared with $1,181,000,000 in the prior year. Partially offset by an increase in net sales in the fresh and value-added product segment driven by higher per unit selling prices. The decrease in gross profit was primarily due to lower net sales, higher per unit production, and procurement costs, which were partly driven by the negative impact of increased weather-related events, mainly high temperatures and low rainfall in our production areas in Central America and the Philippines. The decrease was partially offset by lower per unit ocean freight costs and higher per unit selling prices in our fresh and value-added product segment.
Monica: Our commitment to thoroughly analyze all potential options continues. While we have not yet reached a definitive conclusion, our evaluation process is progressing and our intent remains to make a decision in the near term.
Monica: As previously stated, there can be no assurance that this process will result in a specific strategic outcome.
Monica Vicente: Now, let's move on to our financial results for the second quarter of 2024. Net sales were 1,140 million compared with 1,181 million in the prior year. The decrease in net sales was primarily due to lower banana net sales, which were the result of lower sales volume and lower per unit selling prices. Partially offset by an increase in net sales in the fresh and value at a product segment driven by higher per unit selling prices. Gross profit for the second quarter of 2024 was 113 million compared with 117 million in the prior year, and gross margin was in line with last year at 9.9%.
Monica: Now let's move on to our financial results for the second quarter of 2024.
Monica: Net sales were $1,140,000,000 compared with $1,181,000,000 in the prior year.
Speaker Change: The decrease in net sales was primarily due to lower banana net sales, which were the result of lower sales volume and lower per unit selling prices.
Speaker Change: partially offset by an increase in net sales in the fresh and value-added product segment driven by higher per unit selling prices.
Speaker Change: Gross profit for the second quarter of 2024 was $113 million compared with $117 million in the prior year, and gross margin was in line with last year at 9.9%.
Monica Vicente: The decrease in gross profit was primarily due to lower net sales, higher per unit production and procurement costs, which were partly driven by the negative impact of increased weather-related events, mainly high temperatures and low rainfall in our production areas in Central America and the Philippines, as well as the negative impact of exchange rates. The decrease was partially offset by lower per unit ocean freight costs and higher per unit selling prices in our fresh and value-at-a-product segment. Adjusted Gross Profit, which excludes other product-related charges of 1 million due to shipment disruptions in the Red Sea, an additional cleanup cost in our grease facility associated with the flooding that occurred last year, was 114 million compared with 117 million in the prior year.
Speaker Change: The decrease in gross profit was primarily due to lower net sales, higher per unit production and procurement costs, which were partly driven by negative impact of increased weather-related events.
Speaker Change: mainly high temperatures and low rainfall in our production areas in Central America and the Philippines.
Speaker Change: as well as the negative impact of exchange rates.
Speaker Change: The decrease was partially offset by lower per unit ocean freight costs and higher per unit selling prices in our fresh and value-added product segment.
Speaker Change: Adjusted gross profits, which excludes other product-related charges of $1 million due to shipment disruptions in the Red Sea and additional cleanup costs in our grease facility associated with the flooding that occurred last year.
Speaker Change: with $114 million compared with $117 million in the prior year.
Monica Vicente: Operating income for the second quarter of 2024 was 68 million compared with 72 million in last year. The decrease in operating income was primarily due to lower gross profit and a higher gain on sale of assets in the prior year. Adjusted operating income was 65 million compared with 68 million last year. Adjusted operating income for the second quarter of 2024 excludes the $1 million of other product-related charges previously mentioned, as well as a $3 million gain on the sale of a European warehouse and a $2 million insurance recovery associated with a fire damage at a South America warehouse facility in the fourth quarter of 2023.
Monica Vicente: Operating income for the second quarter of 2024 was $68 million, compared with $72 million last year. The decrease in operating income was primarily due to lower gross profit and a higher gain on sale of assets in the prior year. Adjusted operating income was $65 million, compared with $68 million last year. Adjusted operating income for the second quarter of 2024 excludes the $1 million of other product-related charges previously mentioned, as well as a $3 million gain on the sale of a European warehouse and a $2 million insurance recovery associated with a fire damage at a South America warehouse facility in the fourth quarter of 2023.
Speaker Change: Operating income for the second quarter of 2024 was $68 million compared with $72 million last year.
Speaker Change: The decrease in operating income was primarily due to lower gross profit and a higher gain on sale of assets in the prior year.
Speaker Change: Adjusted operating income was $65 million compared with $68 million last year.
Speaker Change: Adjusted operating income for the second quarter of 2024 excludes the $1 million of other product-related charges previously mentioned, as well as a $3 million gain on the sale of a European warehouse.
Speaker Change: and a $2 million insurance recovery associated with a fire damage at a South America warehouse facility in the fourth quarter of 2023.
Monica Vicente: These gains were partially offset by a 1 million impairment charge in the Philippines. Other income expense, net for the second quarter of 2024, was a gain of 2 million compared with a loss of 6 million in the prior year. The change was mainly due to a gain in an investment-disc order compared with a foreign currency loss in the same period last year. Net income attributable to Fresh-Till-Monte was 54 million for the second quarter of 2024 compared with 48 million in the prior year, and adjusted SDP net income was 51 million compared with 46 million last year.
Speaker Change: These gains were partially offset by a $1 million impairment charge in the Philippines.
Monica Vicente: Other income expense net for the second quarter of 2024 was a gain of $2 million compared with a loss of $6 million in the prior year. The change was mainly due to a gain in an investment this quarter compared with a foreign currency loss in the same period last year.
Speaker Change: Other income expense net for the second quarter of 2024 was a gain of $2 million compared with a loss of $6 million in the prior year.
Speaker Change: The change was mainly due to a gain in an investment this quarter compared with a foreign currency loss in the same period last year.
Monica Vicente: Net income attributable to Fresh Del Monte was $54 million for the second quarter of 2024, compared with $48 million in the prior year. An adjusted FDP net income was $51 million, compared with $46 million last year. Adjusted FDP net income for the second quarter of 2024 excludes the previously mentioned adjustments and the associated $1 million tax effect.
Speaker Change: Net income attributable to Fresh Del Monte was $54 million for the second quarter of 2024, compared with $48 million in the prior year. An adjusted FDP net income was $51 million, compared with $46 million last year.
Monica Vicente: Adjusted SDP net income for the second quarter of 2024 excludes the previously mentioned adjustments and the associated $1 million tax effect. Our diluted earnings per share were $1.12 in the second quarter of 2024 compared with 99 cents in the prior year. Adjusted diluted earnings per share were $1.6 compared with 96 cents last year. Adjusted EBITDA for the second quarter of 2024 was 89 million, or 8 percent of net sales. This compares favorably to the same quarter last year, where adjusted EBITDA was 85 million, or 7 percent of net sales.
Speaker Change: Adjusted FDP net income for the second quarter of 2024 excludes the previously mentioned adjustments and the associated $1 million tax effect.
Speaker Change: Our diluted earnings per share were $1.12 in the second quarter of 2024, compared with $0.99 in the prior year.
Monica Vicente: Adjusted diluted earnings per share were $1.06, compared with $0.96 last year. Adjusted EBITDA for the second quarter of 2024 was $89 million, or 8% of net sales. This compares favorably to the same quarter last year, where adjusted EBITDA was 85 million, or 7% of net sales, beginning with our fresh and value-added product segment. The increase in net sales was primarily a result of higher per unit selling prices of avocados along with higher sales volume and higher pricing of non-tropical fruit. The increase was partially offset by lower net sales of vegetables and fresh cut fruit due to lower sales volume.
Speaker Change: Adjusted diluted earnings per share were $1.06 compared with $0.96 last year.
Speaker Change: Adjusted EBITDA for the second quarter of 2024 was $89 million or 8% of net sales.
Speaker Change: This compares favorably to the same quarter last year where adjusted EBITDA was $85 million or 7% of net sales.
Monica Vicente: I will now go into more detail on the second quarter performance for each of our segments. Beginning with our fresh and value added product segments. Net sales for the second quarter of 2024 were $694 million compared with $678 million in the prior year. The increase in net sales was primarily a result of higher per unit selling prices of avocados, along with higher sales volume and higher pricing of non-tropical fruit. The increase was partially offset by lower net sales of vegetables and fresh-cut fruit due to lower sales volume. Gross profit was 78 million compared with 62 million in the prior year.
Speaker Change: I will now go into more detail on the second quarter performance for each of our segments, beginning with our Fresh and Value Added Product segment.
Speaker Change: Net sales for the second quarter of 2024 were $694 million compared with $678 million in the prior year.
Speaker Change: The increase in net sales was primarily a result of higher per unit selling prices of avocados, along with higher sales volume and higher pricing of non-tropical fruit.
Speaker Change: The increase was partially offset by lower net sales of vegetables and fresh cut fruit due to lower sales volume.
Speaker Change: Gross profit was $78 million, compared with $62 million in the prior year. And gross margin was 11.2%, compared with 9.2% last year.
Monica Vicente: And gross margin was 11.2 percent compared with 9.2 percent last year. The increase in gross profit was primarily driven by higher per unit selling prices, which was partially offset by higher per unit production and procurement costs of avocados, as well as the negative impact of exchange rates, primarily a stronger Costa Rican colon and Mexican peso. Gross profit for the second quarter of 2024 includes the one million of other product-related charges, previously mentioned.
Speaker Change: The increase in gross profit was primarily driven by higher per unit selling prices, which was partially offset by higher per unit production and procurement costs of avocados.
Speaker Change: well as the negative impact of exchange rates, primarily a stronger Costa Rica Colón and Mexican peso.
Speaker Change: Gross profit for the second quarter of 2024 includes the one million of other product related charges previously mentioned.
Monica Vicente: In our banana segment, net sales for the second quarter of 2024 were $394 million compared with $449 million in the prior year. The decrease in net sales was primarily due to a 10% reduction in sales volume. During the quarter, we experienced lower sales volume in North America due to competitive market pressures and lower sales volume and lower per unit pricing in Asia, along with the negative impact of exchange rate fluctuations, mainly a weaker Japanese yen. Gross profit was 30 million compared with 51 million in the prior year, and gross margin was 7.6% compared with 11.3% last year.
Monica Vicente: Gross profit was $78 million compared with $62 million in the prior year. In our banana segment, net sales for the second quarter of 2024 were $394 million compared with $449 million in the prior year. During the quarter, we experienced lower sales volume in North America due to competitive market pressures and lower sales volume and lower per unit pricing in Asia, along with the negative impact of exchange rate fluctuations, mainly a weaker Japanese yen, in our other products and services segment for the second quarter of 2024.
Speaker Change: In our banana segment, net sales for the second quarter of 2024 were $394 million compared with $449 million in the prior year.
Speaker Change: The decrease in net sales was primarily due to a 10% reduction in sales volume.
Monica Vicente: The decrease in gross profit was principally driven by lower net sales, higher per unit production and procurement costs, and the negative impact of fluctuations in exchange rates due to a stronger Costa Rica colon. The decrease was partially offset by lower per unit distribution and ocean freight costs.
Monica Vicente: In our other products and services segment for the second quarter of 2024, net sales were $51 million compared with $54 million in the prior year. The decrease in net sales was primarily due to the sale of our Chilean plastic products business, which we sold in the second quarter of 2023. Gross profit was 6 million compared with 4 million in the prior year, and gross margin was 10.7% compared with 7.8% last year. The increase in gross profit was primarily due to higher per unit selling prices in our poultry and meats business.
Monica Vicente: Net sales were 51 million compared with 54 million in the prior year. The increase in gross profit was primarily due to higher per unit selling prices in our poultry and meat business. Moving on to selected financial data, this marks the lowest level of long-term debt since the end of 2017, reflecting our commitment to maintaining a prudent capital structure and creating long-term value for our shareholders. By lowering our debt, our leverage ratio is now 1.2 times adjusted EBITDA.
Monica Vicente: Now moving on to selective financial data. Our income tax rate for the second quarter of 2024 was 19%. In line with the prior year, we expect our effective tax rate for the full year to approximate 21%.
Monica Vicente: Now, let's turn our attention to our financial position, focusing on our net cash and capital spend for the quarter. Net cash provided by operating activities for the first six months of 2024 was 144 million, compared with 133 million in the prior year. The increase was primarily due to working capital situations mainly driven by higher levels of accounts payable and accrued expenses due to tibing of period and payments to suppliers, along with lower levels of accounts receivables. Long term debt decreased by 29% to 285 million at the end of the second quarter. with 400 million at the end of the same quarter last year.
Speaker Change: Net cash provided by operating activities for the first six months of 2024 with $144 million compared with $133 million in the prior year.
Speaker Change: The increase was primarily due to working capital fluctuations, mainly driven by higher levels of accounts payable and accrued expenses due to timing of period end payments to suppliers, along with lower levels of accounts receivables.
Speaker Change: Long term debt decreased by 29% to 285 million at the end of the second quarter.
Speaker Change: Compared with $400 million at the end of the same quarter last year.
Monica Vicente: This marks the lowest level of long-term debt since the end of 2017. Reflecting our commitment to maintaining a prudent capital structure and creating long-term value for our shareholders. By lowering our debt, our leverage ratio is now 1.2 times adjusted EBITDA. As it relates to our capital expenditures for the first six months of 2024, we invested 21 million compared with 19 million in the prior year. We expect capital expenditures for the year to be in the range of 60 to 65 million.
Speaker Change: This marks the lowest level of long term debt since the end of 2017, reflecting our commitment to maintaining a prudent capital structure and creating long term value for our shareholders.
Speaker Change: By lowering our debt our leverage ratio is now one two times adjusted EBITDA.
Monica Vicente: As it relates to our capital expenditures, for the first six months of 2024, we invested $21 million compared with $19 million in the prior year. We expect capital expenditures for the year to be in the range of 60 to 65 million. As announced in our press release, we declared a quarterly cash dividend of $0.25 per share, payable on September 6, 2024, to shareholders of record on August 15, 2024. They have approximately 80 and 75%, respectively, under yearly banana sales contracts. We are pleased with the progress in our fresh and value-added product segment, where we continue to experience notable gross margin improvement.
Speaker Change: As it relates to our capital expenditures for the first six months of 2024, we invested $21 million compared with $19 million in the prior year we.
Speaker Change: We expect capital expenditures for the year to be in the range of $60 million to $65 million.
Monica Vicente: As announced in our press release, we declared a quarterly cash dividend of 25 cents per share, payable on September 6, 2024, to shareholders of record on August 15, 2024.
Speaker Change: As announced in our press release, we declared a quarterly cash dividend of <unk> 25 per share payable on September six 2024 to shareholders of record on August 15 2024.
Monica Vicente: I now want to give you an outlook for the full year of 2024 by business segments. In our fresh and value added segment, we anticipate net sales for the full year to be in the range of 1 to 2% higher compared to the prior year, primarily driven by our avocado, pineapple, and fresh cut fruit product lines. It's important to note that the third quarter traditionally presents challenges due to the influx of competing summer fruit and vegetables entering the market. However, we remain confident in our strategy and product offerings to navigate the seasonal pressures effectively. For our banana segment, due to the ongoing competitive market pressures, along with shipping challenges through the Red Sea, for the full year we anticipate our sales volume to be 5 to 7% lower and our per unit pricing to be 4 to 5% lower as compared to the prior year.
Speaker Change: I now want to give you an outlook for the full year of 2024 by business segment.
Speaker Change: In our fresh and value added segment, we anticipate net sales for the full year to be in the range of 1% to 2% higher compared to the prior year.
Speaker Change: Primarily driven by our avocado pineapple and fresh cut fruit product lines.
Speaker Change: It's important to note that the third quarter traditionally presents challenges due to the influx of competing summer fruit and vegetables entering the market.
Speaker Change: However, we remain confident in our strategy and product offerings to navigate these seasonal pressures effectively.
Speaker Change: For our banana segment due to the ongoing competitive market pressures along with shipping challenges through the Red Sea for the full year, we anticipate our sales volume to be 5% to 7% lower on a per unit pricing to be 4% to 5% lower as compared to the prior year.
Monica Vicente: Historically, the second half of the year sees higher industry volumes and lower pricing. It's important to note that in our two largest markets, North America and Europe, they have approximately 80% and 75%, respectively, under yearly banana sales contracts. Our expectations for the remainder of 2024 for the other products and services segment remain consistent with the results reported in the first half of the year. We are pleased with the progress in our fresh and value added product segments, where we continue to experience notable growth margin improvement. Additionally, we have made substantial progress in strengthening our balance sheet and reducing our debt to the lowest level in six years.
Speaker Change: Historically, the second half of the year sees higher industry volumes and lower pricing.
Speaker Change: It is important to note that in our two largest markets North America and Europe.
Speaker Change: They have approximately 80% and 75% respectively.
Speaker Change: Your year yearly banana sales contracts.
Speaker Change: Our expectations for the remainder of 2024 for the other products and services segment remained consistent with the results reported in the first half of the year.
Speaker Change: We are pleased with the progress in our fresh and value added products segment, where we continue to experienced notable gross margin improvement.
Speaker Change: Additionally, we have made substantial progress in strengthening our balance sheet and reducing our debt to the lowest level in six years, we believe these steps position us well.
Monica Vicente: We believe these steps position is well for future growth and stability.
Speaker Change: Well for future growth and stability.
Monica Vicente: This concludes our financial review.
Speaker Change: This concludes our financial review, we can now turn the call over to Q&A Kayla.
Operator: We can now turn the call over to Q&A. Kayla. Thank you.
Kayla: Thank you.
Operator: And at this time, I would like to remind everyone: in order to ask a question, press star is in the number one on your telephone keypad.
Kayla: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
Mitchell Pinheiro: Our first question comes from the line of Mitchell Panero, which drew to Vent Company. Your line is open.
Operator: Our first question comes from the line of Mitchell Pinheiro with Strudivant Company. Your line is open. Yeah.
Speaker Change: Our first question comes from the line of Mitchell Pinheiro with Sturtevant <unk> Company. Your line is open.
Mitchell Pinheiro: Yeah, hey, good afternoon. Hi, I'm doing really well, and it was a good quarter to boot, so... And I really do appreciate some of the guidance or comments around your segments. Very helpful.
Mitchell Pinheiro: Yeah, hi. Good afternoon. Hi, really well, and it was a good quarter to boot. So I guess my first question is, and I really do appreciate some of the guidance or comments around your segments. Very helpful. So you had a particularly strong margin improvement in the fresh cut, fresh and value add, I should say. Is that sustainable in the back half? More or less, is that the level that we should be looking at? Or were there some benefits, like either mix or something, in the quarter that elevated it? I know like 11% in area that you kind of, you're looking to get to, you know, as a target, but, or higher maybe.
Mitchell Pinheiro: Yes, hi.
Mitchell Pinheiro: Good afternoon.
Speaker Change: One moment.
Speaker Change: Really well and it was a good quarter to boot.
Speaker Change: I guess my first question is.
Speaker Change: I really do appreciate some of the.
Speaker Change: Guidance or comments around your segment is very helpful.
Mitchell Pinheiro: So you had a particularly strong margin improvement in the fresh cut, fresh in value add, I should say. And like, is that sustainable in the back half, more or less? Is that the level that we should be looking at, or were there some benefits, like either mix or something in the quarter that elevated it? I know that 11% is an area that you're looking to get to as a target, or higher, maybe, but I'm just curious. Are we there yet, or were there a couple items in the quarter that helped?
Speaker Change: So yeah.
Speaker Change: You had a particularly strong.
Speaker Change: Margin improvement in the fresh cut fresh and value add I should say and like what.
Speaker Change: Is that sustainable in the back half.
Speaker Change: More or less is that the level that we should be looking at or where there is some benefits like either mix or something in the quarter that elevated I know like 11% scenario that you're kind of youre looking to get to.
Speaker Change: As a target but.
Speaker Change: Or higher maybe but.
Monica Vicente: But I'm just curious, are we very yet? Or was there a couple of items in the quarter? That helped. So Mitch, we had a good quarter. I think we're making good progress and improving the fresh and value added margin. As I said, you know, you know, the second half, especially the summer months, there's competing fruit. So there will be more pressure on the segments. But we're definitely making progress, and we definitely see an improvement on the margins. We have, you know, the great mix with our Honey Glow pineapple, our Pink Glow, our fresh cup products are doing well.
Speaker Change: I'm just curious are we there yet or is it was a couple of items in the quarter that helped.
Monica Vicente: So, Mitch, we had a, you know, a good quarter. I think we're making good progress in improving the fresh and value-added margin. As I said, you know, in the second half, especially the summer months, there are competing fruits, so there will be more pressure on the segments. But we're definitely making progress, and we definitely see an improvement in the margins. We have, you know, a great mix with our Honey Glow Pineapple, our Pink Glow, our Fresh Cup products are doing well, like Mr. Abugasele said, our UK Fresh Cup facility has improved its margins because of the investments we've made. And our non-tropical, especially grapes, have really been performing well this year. So, definitely getting on this segment, but we expect to have a good year.
Speaker Change: Go ahead go ahead right. So Mitch we had a good quarter I think we're making good progress in improving the fresh and value added margin as I said.
Mitch: The second half, especially the summer months Theres competing fruit. So there will be more pressure on this segment, but we are definitely making progress and we definitely see an improvement on the margins. We have the great mix with our honey blow pineapple are pink low our fresh cut products are doing well like Mr. OMA Aboukir Sallie said are you.
Monica Vicente: Like Mr. Abu Ghassali said, our UK Fresh Cup facility has improved their margins because of the investments we've made and are non-tropical, specially grapes have really been performing well this year. So definitely getting getting where we want to be and that fresh and value added product category full year. You know, there is some pressure on the segment, but we expect to have a good year.
K fresh: K fresh.
Speaker Change: Fresh cut facility has improved their margins because of the investments we've made and are on a non tropical especially grapes have really been performing well this year.
K fresh: So definitely getting.
K fresh: Getting where we want to be in that fresh and value added product.
Speaker Change: Category full year, there is some pressure on <unk>.
K fresh: On the on this segment, but we expect to have a good a good year.
Mohammad Abu Ghazali: I would like to add to Monica's remarks here. Let's say reinventing Fresh Del Monte in a way that will be, a lot more value-added products and a lot more innovation and development that I believe will continue and I believe it will accelerate as we go forward.
Mohammad Abu Ghazali: I would like to add to Monica's remarks here and clarification that I have been saying that for quite a while, Mitch, that we are, let's say, reinventing fresh, the month in a way that will be a lot more value-added products and a lot more innovation and development that, in my opinion, we will restructure the company in a completely different way. Then it was for the last 27, 28 years. So, as we go forward, you will be hearing from us more information and more details about our developments and about our new, let's say, value-added and higher-margin products that will be rolling out into the market.
Speaker Change: I would like to add to monarch is remarks.
Speaker Change: Clarification Deb.
K fresh: I have been saying that for quite a while Mitch that we are.
Speaker Change: Let's say the invented fresh del Monte in a way that will be.
Speaker Change: A lot more value added products and a lot more innovation and development.
Speaker Change: In my opinion.
Speaker Change: We've restructured the company in a completely different way that it was for the last two separate.
Speaker Change: Yes.
Speaker Change: So as we go forward you will be hearing from us more information and more details about our developments.
Speaker Change: Our new let's say.
Speaker Change: Value added.
Speaker Change: The higher margin products that will be.
Speaker Change: Rolling out into the market.
Mohammad Abu Ghazali: So this moment that you have seen or you have witnessed now in the second quarter, I believe it will continue and I believe it will accelerate as we go forward. That's what I can say at this stage.
Speaker Change: This momentum that you have seen or you have witnessed now in the second quarter I believe it will continue and I believe it will extend it accelerates as we go forward.
Speaker Change: That's what I can say at this stage life.
Mohammad Abu Ghazali: Well, I'm curious. So, like, your project in Kenya on this. It will be twofold. It will be less in terms of money spent, and it will be.
Mohammad Abu Ghazali: Well, I'm curious. So, like your project in Kenya, is that something where you're creating this for internal use? So it becomes like a cost offset, or will become a separate revenue stream? It will be, actually, it will be two folds. It will be exactly what, like you said, it will help reduction of our cost by using, let's say, more organic bio-fertilizers rather than the chemicals. That's one side on this; it will be two folds. It will be less in terms of money spent. And it will be more sustainable than any other product. So we will win on the sustainability front as well on the commercial.
Speaker Change: I'm curious so youre your project in Kenya.
Speaker Change: <unk>.
Speaker Change: Is that something where.
Speaker Change: Youre, creating this for internal use so it becomes like a cost offset or will become a separate revenue stream.
Speaker Change: And probably it will be actually it will be two folds. It will be exactly like you said.
Speaker Change: It will help the reduction of our cost by.
Speaker Change: By using let's say more organic biocryst delays us rather than the chemicals.
Speaker Change: <unk> sites.
Speaker Change: It will be two fold it would be less in terms of money spent.
Speaker Change: And it will be.
Speaker Change: More sustainable than any other products. So we will win on the sustainability front as one of the commercial front.
Mitchell Pinheiro: in front. Second part of your question is that it's going to be at the preliminary stage. It will be mainly for our use in our operations, but definitely our aim and target is to go into the open market and start marketing the products also to third parties and other growers. And Kenya, and hopefully it is stuff for the guy in general. And just a follow-up on that is when I don't remember what you said about the plant. When does it open? And how long would it take to get a meaningful scale? We just actually started last month, Mitch.
Speaker Change: The second part of your question is that is going to be.
Speaker Change: At the.
Speaker Change: Preliminary stage it will be mainly for our use in our operations, but definitely our target is to go into the open market stock market and the products also to third parties of the cores and giving you and hopefully it is tough with you guys in general.
Speaker Change: And just a follow up on that is.
Speaker Change: So when wendy's.
Speaker Change: I don't remember what you said about the net.
Speaker Change: When does it open.
Speaker Change: And how long would it take.
Mohammad Abu Ghazali: to get a, you know, meaningful scale.
Speaker Change: To get.
Speaker Change: Meaningful scale.
Speaker Change: We've just actually started last month, Mitch we started production in a very small way.
Mohammad Abu Ghazali: We started production in a very small way. Don't forget that this is just a start-up. We do have associate partners in this venture that we have in Kenya. A minority partner that is from Spain, a Spanish company that is specialized in this category. And of course, that technology and know-how and recipes and formulas is a very important backbone of our new development. So it will be kind of, I would give it another to the end of the year. And we will see more, let's say, concrete development and results from that point on.
Speaker Change: Don't forget that this is like.
Speaker Change: Yes.
Mitch: Just to start up.
Mitch: We do have.
Mitch: Associates partners in this venture and all of that we have in.
Mitch: And minority partner that is from Spain, Spanish company that is specialized in this category.
Mitch: Of course that technology, and Knowhow and recipes and formulas.
Speaker Change: Boston.
Speaker Change: Backbone of our.
Speaker Change: New development, so it will be kind of I would give it.
Speaker Change: So the end of the Abu we'll see more.
Speaker Change: Let's say.
Speaker Change: Concrete development of the results from that point on.
Mohammad Abu Ghazali: Okay. And then, when it comes to the produce category in the United States, what are you seeing? Given the inflation that we've seen, oh, it's global, but just talking about North America in particular, are you seeing the produce category having any unusual either demand trends, or is there anything there that we can call out that we should know? I believe that the produce industry, in general, has a challenge in terms of the pricing in the market. And that is reflecting actually on many fronts, as we have seen. We have never seen any time in the last 10, 15 years that the banana prices in Ecuador, for instance, will not come down in the summer.
Speaker Change: Okay.
Speaker Change: And then when it comes to.
Speaker Change: The produce category in the United States, I mean or what have you.
Speaker Change: What are you seeing.
Speaker Change: Given given the inflation that we've seen it's global but just talking about North America.
Speaker Change: In particular are you seeing the produce category having any.
Speaker Change: Unusual.
Speaker Change: Either.
Speaker Change: Demand trends or.
Speaker Change: <unk>.
Speaker Change: Is there is there anything there that you can call out that we shouldnt have.
Speaker Change: I believe that the produce industry in general.
Speaker Change: A challenge in terms of.
Speaker Change: The pricing in the market.
Mohammad Abu Ghazali: And that is actually reflected on many fronts. As we have seen, we have never seen any time in the last 10-15 years when the banana prices in Ecuador, for instance, have not come down. Unfortunately, the prices at the shelf level, besides bananas, I'm not talking about bananas, but anything else besides bananas, has a quite high price tag. And that is driving, in my opinion, consumers from consuming more or consuming enough to move this product off the shelf.
Speaker Change: That is reflecting actually on many fronts as we have seen and we have never seen any any time in the last 10 15 years that the banana prices in Ecuador for instance will not come down.
Speaker Change: And the summer.
Mohammad Abu Ghazali: I mean, usually this time of the year, prices in Ecuador on the FOB level would be around $4, $3, $4, $5 at the most. Now we are seeing prices in the $6, $7, $8, $9 average for the FOB, which has never happened before. So, and that is the result of so many losses and so much, so many farmers going out of the market or growing less bananas. The same happens in Central America. Usually, there is surplus at this time of the year. Now we don't see any surpluses in Central America. That's as far as bananas are concerned.
Speaker Change: Usually this time of the year prices in Ecuador.
Speaker Change: <unk> level would be around 4345 of the most.
Speaker Change: Now we are seeing prices in the $6 $789.
Speaker Change: Average for the fall, which has never happened before so that is a result of solvent and losses and so much.
Speaker Change: Uh huh.
Speaker Change: So many farmers going out of the market.
Speaker Change: Growing less bananas.
Speaker Change: When that happens.
Speaker Change: In Central America, usually there is a surplus at this time of the year now we don't see any surpluses in Central America.
Speaker Change: Far as banana, Scott, but if you look at the produce business in general.
Mohammad Abu Ghazali: But if you look at the produce business in general. The price is at the shelf level. Beside bananas, I'm not talking about bananas, but anything else besides bananas is quite a high price tag. And that is driving, in my opinion, consumers from consuming more or consuming enough to move this product off the shelf. And that's why we see now really less competition, even in the valley in Salinas, where we are having our vegetable business. We see that it is becoming more rationalized and things are getting improved as far as our operations are concerned. And that is the result of less demand and less movement in the market.
Scott: Unfortunately, the prices at the shelf level, besides by that I'm, not talking about bananas, but anything else besides banana.
Scott: Is quite.
Speaker Change: Hi.
Scott: The price deck.
Speaker Change: That is driving in my opinion consumers from consuming.
Speaker Change: More consuming enough.
Speaker Change: To move this product out of the shelf and Thats why we see now really less.
Mohammad Abu Ghazali: And that's why we see really less competition now; even in the valley in Salinas, where we have our vegetable business, we see that it is becoming more rationalized, and things are getting improved as far as our operations are concerned. And that is a result of less demand and less movement in the market.
Speaker Change: Competition, even in the valley in Salinas, where we are and how they're doing all of this type of business. We see that this is becoming more rationalize.
Speaker Change: Things improved as far as our operations.
Speaker Change: And that is a result of less demand.
Speaker Change: This movement in the market in my opinion. This trend is going to continue for a while.
Mohammad Abu Ghazali: In my opinion, this trend is going to continue for a while until rationalization takes place and prices come down a little bit for consumers to start picking up the products.
Speaker Change: Rationalization to take place as prices come down a bit for consumers to stock.
Speaker Change: Picking up the photos.
Mohammad Abu Ghazali: Very helpful. Was it fresh cut fruit in this particular quarter? Was that impacted by any of this pricing or? Well, I think we have been very lucky that fresh cut fruit has been very well received, continuous expansion, and continuous sell through. And as I said a while ago, the guacamole, fresh guacamole segment that we just started has taken off extremely well. As I said, we started with 650 packs sold in late November last year. And until recently, we have moved over 315,000. And that's just a start. So we believe that this will be a huge category for us going in the future.
Speaker Change: Very helpful was the fresh cut fruit in this particular quarter was that was that impacted by any of this pricing or what.
Mohammad Abu Ghazali: So, I think we have been very lucky that fresh cut fruit has been very well received, continuous expansion, and continuous, you know, sell-through. And as I said a while ago, the guacamole, fresh guacamole segment that we just started has taken off extremely well. As I said, you know, we started with 650 packs sold in late November last year, and until recently, we have moved over 315,000.
Speaker Change: I think we have been very lucky that fresh fresh cut fruit has been very well received continuous expansion and continuous.
Speaker Change: Sell through.
Speaker Change: And as I said, a while ago the guacamole Guacamole segment that we just started.
Speaker Change: Off extremely well.
Speaker Change: As I said, we started with 650 Bucks.
Speaker Change: So.
Speaker Change: In late November last year.
Speaker Change: And until recently, we have moved over 315000 and Thats just stopped so we believe that.
Speaker Change: This will be a huge category for us going into the future. This is a very unique for fresh del Monte to actually.
Mohammad Abu Ghazali: And that's just a start, you know. We believe that this will be a huge category for us going into the future. And this is very unique for Fresh Del Monte, actually. It's been developed and innovated by Fresh Del Monte. It took us over six, seven months of development until this product was created. So, we're quite satisfied and proud that we have been able to create such a product on the market.
Monica Vicente: And this is a very unique for Fresh Del Monte actually. It's been developed, integrated by Fresh Del Monte. It took us over 6-7 months of development until this was created, this product. So we're quite satisfied and proud that we have been able to create such a product in the market. And just to add a little bit on that image, fresh cut fruit has strong pricing. I did most of our products in the fresh and value added product category and strong margins. So fresh cut fruit is definitely in a good form. And pineapple, as you know, is our main product in this category.
Speaker Change: It's been developed innovative principal bumped it took us over six seven months of development until this was created this product so.
Speaker Change: Satisfied.
Speaker Change: I'm proud that we have been able to create such a.
Speaker Change: Progress in the market and just to add a little bit on that Mitch fresh cut fruit has strong pricing.
Monica Vicente: And just to add a little bit on that, Mitch, fresh-cut fruit has strong pricing, as do most of our products in the fresh and value-added product category, and strong margins. So fresh-cut fruit is definitely in good shape.
Mitch: Did most of our products in the fresh and value added product category.
Mitch: And strong margins so fresh cut fruit is definitely in a good form.
Speaker Change: And pineapple as you know.
Speaker Change: Our main and main product in this category.
Mitchell Pinheiro: So yeah, that's what's going to get to is a good segue. I mean, you lead in the pineapple business, and your innovation has been quite good over the last couple of years. You talked about 3% cager in terms of volume. Is that limited just based on the physical production timing, or is that what drives the 3% number, and why wouldn't it be higher? It's actually, we are restricted by land availability and by, you know, I mean, it takes time to grow new fields of pineapple. So this is all internal growth, and this is not coming from third-party growth.
Speaker Change: Yes.
Speaker Change: To get to is a good segue.
Speaker Change: I mean, you lead in the pineapple business and your innovation has been.
Speaker Change: It has been.
Speaker Change: Quite good over the last couple of years, you talked about 3% CAGR in terms of like volume.
Speaker Change: Is that limited just based on physical production timing or.
Speaker Change: Is that what drives the 3% number and why wouldn't it be higher.
Mohammad Abu Ghazali: It's actually, we are restricted by land availability and by, you know, I mean, it takes time to grow new fields of pineapples. So this is all internal growth. And this is not coming from third party growers. And today, you know, it's not so easy to grow into pineapples in a big volume or in a big acreage, since there are limitations, be it in the growing countries or even finding new areas for producing pineapples, strength and backbone of this is this strategy of being vertically integrated, that we can always have the product available, consistency, you know, with consistency in supply and consistency in quality, which really gives confidence and trust to our customers and the consumers at the end of the day.
Speaker Change: It's actually we are.
Speaker Change: Restricted by land availability.
Speaker Change: It takes time to grow.
Speaker Change: So this is all internal growth.
Speaker Change: And this is not coming from third party growers saw.
Mohammad Abu Ghazali: So today, you know, it's not so easy to grow into pineapple in a big volume or in a big acreage since there are limitations in the growing countries or even finding new areas for producing pineapples. And don't forget the most important thing, Mitch, that we have been and we have been saying that for many, many years that we are a vertically integrated company. We produce, we ship, and we sell, and the fresh cut strength and backbone of this is this strategy of being vertically integrated that we can always have the product available, consistency, you know, with consistency and supply and consistency and quality, which really gives confidence and trust to our customers and the consumers at the end of the day.
Speaker Change: Today, it's not so easy to grow and to find us and a big volume already big acreage.
Speaker Change: Since then the limitations be it then.
Speaker Change: And the growing countries or even finding new areas for <unk>.
Speaker Change: Producing pineapples and don't forget the most important thing we mentioned that we have been and we have been saying that for many many years that we are a vertically integrated company, we produce we ship and we said the pledge.
Mohammad Abu Ghazali: <unk> strength.
Speaker Change: Strength.
Speaker Change: The backbone of this is this strategy of being a vertically integrated that we get always have the product.
Speaker Change: Available consistency.
Speaker Change: With consistency.
Speaker Change: Consistency in supply and consistency and quality, which really gives us confidence and trust to our customers.
Mohammad Abu Ghazali: Consumers at the end of the day. So that's that's.
Mohammad Abu Ghazali: So that's a value that we have built over the last 27, 28 years, and that has a huge, huge value today with our infrastructure. We are the number one fresh cut fruit operator in the U.S. and North America, and I believe we will continue to dominate this position going forward.
Mohammad Abu Ghazali: So that's a value that we have built over the last 27, 28 years and that has a huge, huge value today with our infrastructure. We are the number one fresh cut fruit operator in the US, in North America. And I believe we will continue to dominate this position going forward.
Speaker Change: Value that we have built over the last what the.
Speaker Change: Seven.
Speaker Change: Cheers.
Speaker Change: That has a huge huge value today with our infrastructure. We are the number one fresh cut fruits operator.
Speaker Change: In the U S and North America.
Speaker Change: I believe we will continue to dominate disposal.
Speaker Change: Going forward.
Mitchell Pinheiro: Just one more question, and it's red for pineapple. The Honey Glow is a terrific product, and I was wondering whether it's hard to have like a...
Speaker Change: Okay.
Mitchell Pinheiro: Just one more question, and we're ready to pineapple. The Honey Glow is a terrific product. I was wondering whether it's hard to have a patent protection, but a little bit a strategic protection for a while. Are you seeing any competition in the honey glow category, or do you own the category and you have it to yourselves for a while? No, this is a technology that we have developed over the years, how to produce honey glow and how to select honey glows. Of course, competition after our success has tried to copy our plan, and they have tried; but as far as I can see, that nobody has been able to copy and imitate what we have been doing. I think it's not just because of our expertise and knowledge about pineapples, but as well as the variety that we have.
Speaker Change: Just one more question.
Speaker Change: And relative pineapple.
Speaker Change: <unk> is a terrific product.
Speaker Change: And and I was wondering whether it's hard to have like.
Speaker Change: Sort of patent protection, but like a little bit you know strategic protection for a while are you seeing any competition.
Speaker Change: In like the Honey globe category or do you own the category and you have it to yourselves for a while.
Mohammad Abu Ghazali: Now, this is a technology that we have developed over the years, how to produce honey globes and how to select honey globes. And, of course, competition, after our success, has tried to copy our trend. And they have tried, but as far as I can see, nobody has been able to kind of copy and imitate what we have been doing. And I think it's not just because of our expertise and knowledge about pineapples, but also because of the variety that we have.
Speaker Change: Now this is a technology that we have developed over the years, how to produce honey grow and help to select honey goes and of course competition offset our success has tried to copy.
Mohammad Abu Ghazali: Our our our plan and they have tried but as far as I can see that nobody has been able to kind of copy it.
Mohammad Abu Ghazali: What we have been doing and I think it's not just because of.
Mohammad Abu Ghazali: Our expertise and knowledge about pineapples, but as well as the.
Mohammad Abu Ghazali: The variety that we have.
Mohammad Abu Ghazali: And don't forget that we were the one that created the gold pineapple. I mean, it was developed by Del Monte, and we have the original seeds, and that's something that is very, very important to know that we have pure seeds, and that's something that no one else in the market has ever had, because everything that is in the fields today was stolen actually from Del Monte at the time, the early 2000, late 90s, and some of it was not pure material. So, over the years, it starts mutating and starts changing the variety. So I believe in this, and that's why we have that dominant and leading position in this category.
Mohammad Abu Ghazali: And don't forget that we were the ones that created the gold pineapple.
Mohammad Abu Ghazali: And don't forget that we were the ones that created the gold pineapple, and some of it was not pure material, so over the years, it starts mutating and starts, you know, changing the variety. So I believe in this, you know, and
Speaker Change: I mean, it was developed by the lumps that we have the origin and seats and Thats something that is very very important.
Mohammad Abu Ghazali: And all that.
Mohammad Abu Ghazali: We have pure seats and Thats something that no one else in the market has ever had because everything that is a defense today.
Stoller: Stoller actually.
Speaker Change: Pleasure Belmont at the time the early 2019.
Mohammad Abu Ghazali: Nineties.
Mohammad Abu Ghazali: And some of it was not.
Mohammad Abu Ghazali: Material so over the years.
Mohammad Abu Ghazali: Thoughts mutating starts changing.
Mohammad Abu Ghazali: The variety so I believe in to this.
Mohammad Abu Ghazali: That's why we have the dominant.
Mohammad Abu Ghazali: Our leading position.
Mohammad Abu Ghazali: In this category and to add to that Mitch remember the pineapple, we grow over 70% of our volume so that makes a significant difference because we can control the growing the harvesting and thats, where the honey blow. It is really important to have control of that data.
Monica Vicente: And to add to that, I remember for the pineapple, we grow over 70% of our volume. So that makes a significant difference because we can control the growing, the harvesting, and that's where the honey glow. It's really important to have control of that. And our logistics, which help also, they have to have the cold chain all the way through the customer. So I believe that really gives us a huge advantage having control of the production all the way to the customer, and our quality, even if they try to compete with us, our quality is the best.
Mohammad Abu Ghazali: Our logistics.
Mohammad Abu Ghazali: Which help also with the there has to have the cold chain all the way through the customer. So I believe that really gives us a huge advantage having control of the production all the way to the customer.
Mohammad Abu Ghazali: And our quality, even if they try to compete with us for quality is the best.
Operator: All right, well, thank you for your time. Appreciate the questions. Thank you, Mitch. Appreciate it. And, as a reminder, if you would like to ask a question, please press star, then the number one on your telephone keypad. You will pause for just a moment to compile the Q&A roster. And at this time, I'm not seeing any further questions.
Mohammad Abu Ghazali: Okay.
Mohammad Abu Ghazali: Alright, well. Thank you for your time I appreciate the questions.
Mitch: Thank you Mitch appreciate.
Operator: Thank you, Mitch. I appreciate it.
Speaker Change: And as a reminder, if you would like to ask a question. Please press Star then the number one on your telephone keypad, we'll pause for just a moment to compile the Q&A roster.
Operator: And as a reminder, if you would like to ask a question, please press star then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.
Speaker Change: And at this time I'm not seeing any further questions. Mr. Mohammad Abu <unk> Ali I'll turn the call back over to you.
Mohammad Abu Ghazali: Mr. Muhammad Abu Ghazali, I'll turn the call back over to you. Thank you very much, Gali, and I appreciate everybody's presence on this call today. And I hope we speak to you on our next...
Mohammad Abu Ghazali: Thank you very much, Galia, and I appreciate everybody's presence on this call today. And I hope we speak to you on our next call.
Speaker Change: Thank you very much Julia and I appreciate everybody's presence on this call today and I hope we.
Speaker Change: Speak to you.
Mohammad Abu Ghazali: Our next.
Mohammad Abu Ghazali: Port of Call, and wish you a good day. Thank you.
Speaker Change: Port of call.
Mohammad Abu Ghazali: I wish you a good day. Thank you.
Operator: And this concludes today's conference call. He may now disconnect. Please wait.
Mohammad Abu Ghazali: And this concludes today's conference call you may now disconnect.
Speaker Change: Please wait the conference will begin shortly.
Operator: The conference will begin shortly.
Mohammad Abu Ghazali: [music].
Mohammad Abu Ghazali: Yeah.
Mohammad Abu Ghazali: Yes.
Mohammad Abu Ghazali:
Mohammad Abu Ghazali: Yes.
Mohammad Abu Ghazali: [music].