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Dole plc Reports Second Quarter 2022 Financial Results

DUBLIN, August 23, 2022--(BUSINESS WIRE)--Dole plc (NYSE: DOLE) ("Dole" or the "Group" or the "Company") today released its financial results for the three and six months ended June 30, 2022.

Highlights for the three months ended June 30, 2022:

  • Revenue of $2.4 billion

  • Net Income of $48.5 million and Diluted EPS of $0.43

  • Adjusted EBITDA1 of $108.8 million

  • Adjusted Net Income1 of $41.3 million and Adjusted Diluted EPS1 of $0.44

Financial Highlights - Unaudited

Three Months Ended

June 30,

2022

June 30,

2021

June 30

2021

Pro-forma2

Revenue - $’m

2,360

1,210

2,462

Net Income - $'m

48.5

36.8

78.0

Net Income attributable to Dole plc - $'m

41.3

29.2

69.5

Diluted EPS - $

0.43

0.52

0.73

Adjusted EBITDA - $’m1

108.8

94.9

143.3

Adjusted Net Income - $’m1

41.3

41.3

66.5

Adjusted Diluted EPS - $1

0.44

0.74

0.70

Six Months Ended

June 30,

2022

June 30,

2021

June 30,

2021

Pro-forma2

Revenue - $’m

4,605

2,261

4,728

Net Income - $'m

51.8

62.9

141.2

Net Income attributable to Dole plc - $'m

39.9

50.5

127.2

Diluted EPS - $

0.42

0.91

1.34

Adjusted EBITDA - $’m1

190.4

174.1

274.4

Adjusted Net Income - $’m1

69.5

67.2

125.3

Adjusted Diluted EPS - $1

0.73

1.20

1.32

______________________

1Dole plc reports its financial results in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). See full GAAP financial results in the appendix. Adjusted EBIT, Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings Per Share, Adjusted Effective tax rate and Net Debt are non-GAAP financial measures. Refer to the appendix of this release for an explanation and reconciliation of these and other non-GAAP financial measures used in this release to comparable GAAP financial measures.

2This press release contains pro-forma financial information. The unaudited pro-forma consolidated financial statements for Dole plc illustrate the effects of the acquisition of Dole Food Company, Inc. ("DFC" or "Legacy Dole") by Total Produce ("TP") and the effects of the IPO and refinancing as if they had occurred on January 1, 2020. This is consistent with the pro-forma financial statements presented in the Form F-1 filed with the SEC at the time of the IPO.

Commenting on the results, Carl McCann, Executive Chairman said:

"One year ago we created Dole plc, the global leader in fresh produce, following the merger of Total Produce and Dole Food Company. The enhanced scale and diversification of our vertically integrated business enabled us to deliver strong results for the second quarter of 2022, in line with our expectations.

Due to a slower than anticipated return to full operating profitability in our Fresh Vegetables segment and the translation impact from the strengthening US Dollar, we are now targeting Adjusted EBITDA in the range of $330.0 million to $350.0 million for the full year, a reduction of approximately 5.5% from prior guidance.

We greatly appreciate the achievements of our talented and dedicated people and their significant contributions during the past year."

Revenue for the three months ended June 30, 2022 increased to $2.4 billion from $1.2 billion. The increase was primarily driven by the impact of revenue from Legacy Dole following the acquisition by Dole plc. Compared on a pro-forma basis, revenue decreased by 4.2% or $102.3 million primarily due to negative foreign currency translation movements of $112.2 million and a net unfavorable impact of $68.8 million from acquisitions and divestitures. On a like-for-like basis, revenue increased 3.2% or $78.7 million with growth in all segments with the exception of Fresh Vegetables.

Adjusted EBITDA for the three months ended June 30, 2022 increased to $108.8 million. On a pro-forma comparative basis, Adjusted EBITDA decreased 24.1% or $34.5 million primarily due a decline in the Fresh Fruit segment against a very strong comparative in the prior year. The prior year comparative had the benefit of strong market conditions due to tight supply following hurricanes Eta and Iota in November 2020. In addition, the negative impact of currency translation of $4.2 million, primarily on the reported results of the Diversified EMEA segment, and a loss in the Fresh Vegetables segment contributed to the lower group Adjusted EBITDA. This was offset in part by stronger performance in Diversified Americas and on a like-for-like basis in Diversified EMEA.

Adjusted Net Income for the three months ended June 30, 2022 was $41.3 million, compared to $66.5 million on a pro-forma basis. The decreases on a pro-forma comparative basis were predominantly due to the decreases in Adjusted EBITDA noted above, offset in part by a lower tax expense. Adjusted Diluted EPS for the three months ended June 30, 2022 was $0.44 compared to $0.70 for the pro-forma comparative three months ended June 30, 2021.

Selected Segmental Financial Information (Unaudited)

Three Months Ended

June 30, 2022

June 30, 2021

Pro-forma

(U.S. Dollars in thousands)

Revenue

Adjusted EBITDA

Revenue

Adjusted EBITDA

Fresh Fruit

$

805,831

$

57,985

$

778,798

$

85,726

Diversified Fresh Produce - EMEA

849,848

39,371

951,848

40,984

Diversified Fresh Produce - Americas & ROW

448,200

17,142

423,966

18,118

Fresh Vegetables

309,226

(5,687

)

332,273

(1,553

)

Intersegment

(52,970

)

(24,493

)

Total

$

2,360,135

$

108,811

$

2,462,392

$

143,275

Six Months Ended

June 30, 2022

June 30, 2021

Pro-forma

(U.S. Dollars in thousands)

Revenue

Adjusted EBITDA

Revenue

Adjusted EBITDA

Fresh Fruit

$

1,555,634

$

119,866

$

1,523,412

$

177,313

Diversified Fresh Produce - EMEA

1,641,003

59,472

1,745,588

65,911

Diversified Fresh Produce - Americas & ROW

911,892

29,445

845,659

28,214

Fresh Vegetables

583,977

(18,433

)

659,974

2,981

Intersegment

(87,389

)

(46,478

)

Total

$

4,605,117

$

190,350

$

4,728,155

$

274,419

Fresh Fruit

Revenue for the three months ended June 30, 2022 increased 3.5% or $27.0 million compared to pro-forma revenue for the three months ended June 30, 2021. Revenue was positively impacted by increased pricing in commercial cargo, increased pricing in North America for bananas and higher worldwide volumes and pricing in pineapples. This was partially offset by lower pricing in non-core markets for bananas.

Adjusted EBITDA for the three months ended June 30, 2022 decreased 32.4% or $27.7 million compared to the prior year on a pro-forma basis. The prior year comparative had the benefit of strong market conditions due to tight supply conditions following hurricanes Eta and Iota in November 2020. Adjusted EBITDA was additionally negatively impacted by higher ocean and inland freight costs, higher costs in packaging, fertilizers and other materials, and a decrease in prices for volumes sold to non-core markets. These higher costs were partially offset by higher pricing in core markets as well as strong performance in the commercial cargo business.

Diversified Fresh Produce – EMEA

Revenue for the three months ended June 30, 2022 decreased 10.7% or $102.0 million compared to pro-forma revenue for the three months ended June 30, 2021. This was primarily driven by a negative translation impact on currency of $110.3 million due to the strengthening of the U.S. dollar in the quarter against the euro, Swedish krona, and sterling. In addition, there was a net negative impact on revenue from divestitures and acquisitions of $68.8 million in the quarter. On a like-for-like basis, revenue grew 8.1% or $77.1 million across the division, driven by increased pricing and significant revenue growth in South Africa due to the different timing of a key export season. This was partially offset by some logistics challenges in Europe which impacted volumes.

Adjusted EBITDA for the three months ended June 30, 2022 decreased 3.9% or $1.6 million compared to the prior year on a pro-forma basis. The decrease in Adjusted EBITDA was primarily a result of a negative currency translation effect of $4.7 million when translating the results of euro, Swedish krona and sterling businesses into the U.S. dollar which strengthened significantly against European currencies when compared to the prior year. On a like-for-like basis, Adjusted EBITDA increased 7.4% or $3.0 million with a strong performance from our Spanish and U.K. businesses in the quarter, offset by a more challenging quarter for our Northern European businesses due to logistical challenges.

Diversified Fresh Produce – Americas & ROW

Revenue for the three months ended June 30, 2022 increased 5.7% or $24.2 million versus the prior year on a pro-forma basis. The increase was driven primarily by strong performance in the potato, onion and avocado categories as well as a recovery in Chilean grape volumes after weather impacted volumes in the prior year quarter.

Adjusted EBITDA for the three months ended June 30, 2022 decreased 5.4% or $1.0 million versus the prior year on a pro-forma basis, driven by the prior year quarter having a seasonal timing benefit compared to the current quarter and a challenging quarter in a joint venture's kiwi business. Excluding seasonal timing impacts, there was strong performance in the majority of the North American businesses in the quarter, in particular in avocados, potatoes and onions.

Fresh Vegetables

Revenue for the three months ended June 30, 2022 decreased 6.9% or $23.0 million compared to the prior year on a pro-forma basis. Revenue was negatively impacted by lower volumes of value added salad products due to both lost volumes following the value added salad recalls in December 2021 and January 2022, and lower industry demand. Revenue was also impacted by a planned decrease in volumes in fresh packed vegetables products. These decreases were partially offset by price increases in value added salads products, and significantly stronger pricing in fresh packed vegetables products supported by the reduced volume strategy.

Adjusted EBITDA for the three months ended June 30, 2022 was a loss of $5.7 million compared to a loss of $1.6 million in the pro-forma comparative period. Adjusted EBITDA was negatively impacted by lower revenue and lower cost absorption due to lower volumes, as well as by inflationary pressures on freight, packaging and labor costs. These challenges in the valued added salads business were partially offset by an improved performance in Fresh Packed vegetable products.

Capital Expenditures

Capital expenditures for the six months ended June 30, 2022 was $39.4 million, which included continued progress on the final farm renovations in Honduras following the 2020 hurricanes, investments in other farm renovation and glasshouse projects across our growing regions, and ongoing investments in IT, logistics and efficiency projects in our warehouses and processing facilities.

Net Debt

Net Debt as of June 30, 2022 was $1.06 billion. As previously announced, Dole entered into a new three-year, committed trade receivables arrangement in May 2022. This facility provides an additional source of financing for the Group at a lower cost. The maximum amount of receivables that can be sold under this agreement at any time is $255.0 million. Upon the execution of the new arrangement and initial derecognition of sold receivables3, the Company received gross cash proceeds of $206.9 million with $39.3 million used to settle the existing trade receivables arrangement. The incremental proceeds of $167.6 million were primarily used to pay down certain balances on the Company's revolving credit facility.

Outlook for Fiscal Year 2022 (forward-looking statement)

For fiscal year 2022, Dole is targeting:

  • Revenue in the range of $9.1 billion to $9.4 billion

  • Adjusted EBITDA in the range of $330.0 million to $350.0 million

  • Capital Expenditures of approximately $110.0 million

  • Net Interest Expense of approximately $60.0 million

  • Adjusted Effective tax rate in the range of 23% to 25%

________________

3Dole derecognizes the sold receivables from the condensed consolidated balance sheets, as it accounts for the arrangements as sales under ASC 860, Transfers and Servicing.

The global economic environment remains uncertain and complex and we are currently seeing positive trends along with some further challenges for the remainder of the year. We are seeing signs of increasing demand in categories with lower retail selling prices such as bananas, whereas there is evidence of demand for higher priced value added products reducing. Additionally, on the positive side we have seen stabilization in prices for key commodities such as packaging, fertilizer and oil.

However, due to the slower than anticipated return to full operating profitability in Fresh Vegetables and a more negative foreign currency translation impact on translation of Euro earnings to U.S. Dollar following a further strengthening of the U.S. Dollar against European currencies, the Company is reducing the full year Adjusted EBITDA target by approximately 5.5% to a range of $330.0 million to $350.0 million.

The geopolitical conflict in Ukraine and Russia is ongoing and as such it remains difficult to accurately predict what overall impact the conflict may have on global trade flows, cost inflation and foreign exchange rates, and how the Group's results of operations and financial condition may be impacted over the remainder of this financial year.

The above outlook includes non-GAAP financial measures. Please refer to the appendix of this release for an explanation and reconciliation of our historical non-GAAP financial measures used in this release to comparable GAAP financial measures.

Dividend

On August 22, 2022, the Board of Directors of Dole plc declared a cash dividend for the second quarter of 2022 of $0.08 per share, payable on October 7, 2022 to shareholders of record on September 16, 2022. A cash dividend of $0.08 per share was paid on July 6, 2022 for the first quarter of 2022.

About Dole plc

A global leader in fresh produce, Dole plc produces, markets, and distributes an extensive variety of fresh fruits and vegetables sourced locally and from around the world. Dedicated and passionate in exceeding our customers’ requirements in over 75 countries, our goal is to make the world a healthier and a more sustainable place.

Webcast and Conference Call Information

Dole plc will host a conference call and simultaneous webcast at 08:00 a.m. Eastern Time today to discuss the second quarter 2022 financial results. The webcast can be accessed within "Events and Presentations" on the company website, www.doleplc.com/investors.

An archived replay of the webcast will also be available shortly after the live event has concluded. The conference call can be accessed live by dialing +1 646 664 1960 or for international callers by dialing +44 203 936 2999. The access code is 204932.

A replay of the call will be available through August 30, 2022, by dialing +1 845 709 8569, or for international callers by dialing +44 203 936 3001. The replay access code is 079116.

Forward-looking information

Certain statements made in this press release that are not historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on management’s beliefs, assumptions, and expectations of our future economic performance, considering the information currently available to management. These statements are not statements of historical fact. The words "believe," "may," "could," "will," "should," "would," "anticipate," "estimate," "expect," "intend," "objective," "seek," "strive," "target" or similar words, or the negative of these words, identify forward-looking statements. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates, or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity. Accordingly, there are, or will be, important factors that could cause our actual results to differ materially from those indicated in these statements. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made except as required by the federal securities laws.

Consolidated Statement of Operations - Unaudited

Three Months Ended

June 30,
2022

June 30,
2021

June 30,
2021

Pro-forma

(U.S. Dollars and shares in thousands, except per share amounts)

Revenues, net

$

2,360,135

$

1,209,598

$

2,462,392

Cost of sales

(2,190,228

)

(1,107,431

)

(2,237,708

)

Gross profit

169,907

102,167

224,684

Selling, marketing, general and administrative expenses

(123,558

)

(72,629

)

(125,710

)

Merger, transaction and other related costs

(8,318

)

Gain on asset sales

7,926

127

3,929

Operating income

54,275

21,347

102,903

Other income (expense), net

8,605

405

(570

)

Interest income

1,453

419

963

Interest expense

(12,985

)

(2,594

)

(11,662

)

Income before income taxes and equity earnings

51,348

19,577

91,634

Income tax expense

(6,003

)

(6,983

)

(22,071

)

Equity in net earnings of investments accounted for under the equity method

3,151

24,238

8,391

Net income

48,496

36,832

77,954

Less: Net income attributable to noncontrolling interests

(7,224

)

(7,593

)

(8,409

)

Net income attributable to Dole plc

$

41,272

$

29,239

$

69,545

..................................................................................................................................

Net income per share attributable to Dole plc - basic

$

0.44

$

0.53

$

0.73

Net income per share attributable to Dole plc - diluted

$

0.43

$

0.52

$

0.73

Weighted average shares outstanding - basic

94,878

55,546

94,878

Weighted average shares outstanding - diluted

94,913

55,748

95,030

Six Months Ended

June 30,
2022

June 30,
2021

June 30,
2021

Pro-forma

(U.S. Dollars and shares in thousands, except per share amounts)

Revenues, net

$

4,605,117

$

2,260,737

$

4,728,155

Cost of sales

(4,301,171

)

(2,074,069

)

(4,281,537

)

Gross profit

303,946

186,668

446,618

Selling, marketing, general and administrative expenses

(247,717

)

(139,380

)

(261,640

)

Merger, transaction and other related costs

(15,095

)

Gain on disposal of businesses

242

1,539

1,539

Gain on asset sales

8,421

127

7,511

Operating income

64,892

33,859

194,028

Other income, net

11,122

700

4,371

Interest income

3,091

836

2,071

Interest expense

(24,629

)

(4,846

)

(22,954

)

Income before income taxes and equity earnings

54,476

30,549

177,516

Income tax expense

(6,423

)

(8,239

)

(46,062

)

Equity in net earnings of investments accounted for under the equity method

3,728

40,637

9,696

Net income

51,781

62,947

141,150

Less: Net income attributable to noncontrolling interests

(11,903

)

(12,399

)

(13,955

)

Net income attributable to Dole plc

$

39,878

$

50,548

$

127,195

..................................................................................................................................

Net income per share attributable to Dole plc - basic

$

0.42

$

0.91

$

1.34

Net income per share attributable to Dole plc - diluted

$

0.42

$

0.91

$

1.34

Weighted average shares outstanding - basic

94,878

55,560

94,878

Weighted average shares outstanding - diluted

94,919

55,797

95,030

Consolidated Balance Sheets - Unaudited

June 30,
2022

December 31,
2021

ASSETS

(U.S. Dollars in thousands)

...