Hortifrut increased its EBITDA by 49,33% in the first quarter of 2020
Hortifrut recorded an EBITDA in the first quarter 2020 of US $ 25,07 million, which represents an increase of 49,33% when compared to the US $ 16,79 million obtained in the first quarter 2019. The higher EBITDA is mainly due to a best selling price, the decrease in operating costs and the decrease in other expenses, by function. Additionally, Hortifrut, given its extensive network of markets and clients, was able to redistribute fruit destined for China to other markets during the COVID-19 outbreak in that country during the months of January and February 2020.
Likewise, during the first quarter of 2020, a profit attributable to the owners of the parent company of US $ 1,38 million was recorded, representing an increase of US $ 6,54 million compared to the same period in 2019. The higher profit is mainly due to a better gross margin of US $ 5,09 million, as a result of a decrease in costs proportionally greater to the lower sales revenue as the volume of Peruvian fruit marketed in the period decreased, this due to the early pruning strategy to ensure a better curve of production for the 2020/21 season, and for a decrease of US $ 6,10 million in other expenses, by function.
It should be noted that at the end of the first quarter 2020, operating costs totaled US $ 151,49 million, decreasing by 20,53% compared to the US $ 190,63 million registered during the first quarter 2019, which is explained by the higher volume commercialized in said period associated with the production curve in Peru, overlapping with the Chilean production of the first quarter 2019. This due to the aforementioned early pruning.
For its part, revenue from ordinary activities reached US $ 176,62 million in the first 3 months of 2020, representing a decrease of 16,16% compared to the same period in 2019. This decrease was mainly due to a drop of 16,90, 9,11% in the volume traded due to the earlier pruning in the fields of Peru, whose fruit supply did not add to the Chilean fruit supply during the period. The lower volume is partially offset by an increase in the average price per kilo of 6,96%, from US $ 7,60 / Kg to US $ XNUMX / Kg.
Regarding the income from ordinary activities, during the first 9 months of the 2019/20 season they remained in line compared to the same period of the previous season, totaling US $ 477,55 million, which is explained by the higher income from the sale of fruit so far this season due to the 13,60% increase in sales volume in that period, being offset by lower average prices and lower sales of services and others.
Regarding EBITDA, during the first 9 months of the 2019/20 season it reached US $ 101,01 million, increasing by 1,34% compared to the EBITDA of US $ 99,67 million registered in the same 9 months of the previous season. This growth is mainly due to the 13,60% increase in the volume traded during the period, partially offset by the 8,07% reduction in the average price per kilo. Additionally, the period shows a decrease in costs and expenses before depreciation (-US $ 5,26 million) proportionally greater with respect to the decrease in income (-US $ 3,93 million), which is explained mainly by the decrease in income from services and others.
Main milestones - 2019/20 season
Hortifrut acquires a non-controlling interest in BFruit
With the aim of further strengthening the leadership position in the marketing of berries in Europe, in February Hortifrut reached an agreement to buy a non-controlling stake in the organization of producers of BFruit in Portugal, especially raspberries. All the volume produced by BFruit will be marketed through the Hortifrut trading platform for Europe, thus increasing the volume of the vertically integrated business that already exists. In addition, this will allow Hortifrut to carry out faster commercial scaling of new varieties of raspberries, blackberries and blueberries from its own varietal development programs around the world.
Frozen Products Business Combination with Alifrut
Regarding the Company's growth strategy, in October 2019, Hortifrut and Alifrut, a subsidiary of Duncan Fox, reached an agreement to globally combine and develop their export business of frozen products with added value in equal parts. As of today, the business combination continues according to the planned process.
The association contemplates direct distribution to clients through Hortifrut's global commercial platforms and Alifrut's industrial and commercial expertise as a multi-product frozen product processor. It will also allow Hortifrut to further consolidate and strengthen its leadership position as a global business platform, by complementing its offer of value-added products.
Sanitary Contingency COVID-19
In order to maintain the commitment to supply berries every day, all year round, the company has sought to ensure the continuity of its operations, adopting measures to ensure the provision of supplies necessary for the proper functioning of all its fields. Currently, the fields where the company is harvesting are China, Mexico and Spain, whose operations are nearing the end of the season and which, due to the harvest season and the measures taken by the Company, have not been greatly affected by the date. Furthermore, the US fields they are starting their production.
In addition, regarding the health contingency resulting from the COVID-19 pandemic, Hortifrut has taken actions in order to protect the health of its collaborators, adopting the telework modality for all officials who can carry out their functions remotely and taking all the recommendations and measures established by the governmental authorities in each country and the world organizations for those who must do it in person.
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