Volumes were up in all markets, but Fyffes suffered from unusually low banana prices in Europe. Yesterday it acknowledged that there could be initial problems with the new system, but it expected that the market should become more stable as it settled down.
The new import regime established a 2 million tonne quota on Latin American banana imports at a tariff of pounds 80 a tonne. Above that level, the duty jumps to pounds 680 a tonne.
'The banana sourcing and marketing strategies we have pursued have left us well placed within the new banana regime,' the company said.
Traditionally, Fyffes' main supplies have come from African, Caribbean and Pacific countries, but in recent years it has made efforts to establish sources in dollar producing areas to serve new customers in Continental Europe.
Fyffes disclosed that it had enlarged its European interests by buying half the shares in Lembcke, the largest Danish importer of fresh fruit, for an undisclosed price. Lembcke, which had a turnover of Ir pounds 84m last year, ripens more than 40 per cent of all bananas eaten in Denmark and accounts for a quarter of all fresh produce sales.
In May, Fyffes established a 50/50 joint venture in Spain with Coplaca, the Canary Islands banana producer that supplies about a quarter of the Spanish market.
Pre-tax profits in the six months to April rose by 13.5 per cent to Ir pounds 14.13m, but operating profit before interest was virtually static at Ir pounds 7.512m. The pre-tax figure was boosted by unusually high interest income for the first half, which rose from Ir pounds 4.9m to Ir pounds 6.6m.
The company had shareholders' funds of Ir pounds 187m and net cash of Ir pounds 91m on 30 April, but warned that interest earned would be substantially less in the second six months because of low interest rates.
It also said that earnings per share for the year to 31 October were not expected to be much higher than those made last year.
Earnings in the first six months were up by 23 per cent at Ir2.75p while the interim dividend was raised 10 per cent to Ir0.39p. Yesterday the shares closed up 2p at 105p.Reuse content