Dole Plc Q3 FY2024 earnings call

Management Statement and Operational Highlights

• Q3 Financial Highlights: Group revenue increased 1% (5.8% like-for-like). Adjusted EBITDA was $82 million, in line with market expectations. Leverage reduced further due to a $36 million decrease in debt despite capital investment in the quarter.
• Fresh Fruit Operational: Delivered a good performance despite drydocking challenges. North America and European markets saw higher banana volumes, but shipping costs remained a concern. Recently agreed to expand the shipping fleet by purchasing two chartered vessels in early 2025.
• Diversified EMEA: Impacted by seasonal timing differences, one-off IT costs, and supply issues, but revenue growth was strong underlying.
• Diversified Americas: Had a very strong like-for-like performance, driven by volume and price growth in North America commodities, including a turnaround in the berry business and avocado margin improvements.
• Fresh Vegetables: Ongoing strategic alternatives exploration for the business, but continued to deliver improved results with positive operating income each quarter of 2024.

Segment Performance

• Fresh Fruit: Revenue increased by 6.6%. Adjusted EBITDA was $42.9 million, a small decrease from the prior year but ahead of expectations. Higher shipping costs due to drydocking were a factor, but higher banana volumes and better pricing in some markets provided partial compensation.
• Diversified EMEA: Reported revenue growth of 5.1% (6.6% on a like-for-like basis), but adjusted EBITDA declined 13.1% (14.5% on a like-for-like basis) due to one-off IT charges, temporary supply issues, and seasonal timing differences.
• Diversified Americas: Reported revenue was impacted by the sale of Progressive Produce, but on a like-for-like basis, revenue increased 7.2%. Adjusted EBITDA increased $3.6 million, driven by volume and price growth across most commodities in North America, particularly in the berries business and avocados.

Guidance

• Raised full-year adjusted EBITDA target to at least $380 million. Acknowledged Q4 may be affected by factors such as higher shipping costs and the strong finish of the prior year, but remains confident in the target.

Risks

• Volatility in shipping costs due to ongoing drydocking processes.
• Seasonal timing differences and supply issues impacting segments like Diversified EMEA.
• Currency fluctuations and market conditions affecting overall financial performance.

Question and Answer

Q: EBITDA guidance for full year and Q4 specifics A: Full-year adjusted EBITDA target is at least $380 million. Q4 may be affected by shipping costs and the strong finish of the prior year, but the company is comfortable with the target.

Q: Diversified Americas profitability and cherry season A: Diversified Americas had a strong year due to improved management processes, cherry season normalization expected, and Q1 next year likely to normalize.

Q: Fresh Fruit supply/demand and Q4 outlook A: Fresh Fruit saw good banana demand and tight supply, Q4 expected to be consistent but without the strong benefit seen last year due to shipping costs.

Q: Vessel expansion and growth potential A: Vessels added for flexibility and capacity to grow, with potential for growth in avocado volumes from Columbia.