Belgian fruit and vegetables producer Greenyard warns that profits will be about 25 % lower in the current financial year because of the listeria infection, the heat wave and a continuing price war. CEO Hein Deprez announces measures.
“Plans in place”
Various factors weigh on the company’s profitability: the recent recall of products potentially contaminated with listeria would cost 30 million euro, while the exceptionally hot and dry summer created shortages of between 30 % and 50 % for certain produce. Finally, the fresh produce division faces fierce price competition. In Belgium and Germany, the company is working on forward-looking business models. Results will only show in medium till long-term.
“Plans to restore profitability have been drawn up. Looking to reduce the debt on Greenyard’s balance sheet, the Board of Directors asked the management to particularly review the strategic options of its portfolio of activities,” explains Deprez. It may therefore divest some of its activities.
During the first quarter of its current financial year, Greenyard’s revenue dropped by 1.5 % to 1.09 billion euro as fresh produce sales fell by 2.4 % to 884.7 million. Results in the Netherlands and France were good, but Belgium, Germany and Poland struggled. In the frozen and canned products division, turnover went down 2.1 % to 174.7 million euro, partly because of terminating unprofitable contracts. The horticulture division (mainly potting soil) did well, however, with growth of 35 % to 34.4 million euros.
