Dole Plc ((DOLE)) has held its Q1 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Dole Plc presented a balanced outlook, highlighting both positive and challenging aspects of the company’s financial performance. While there were notable achievements such as revenue growth, a dividend increase, and successful refinancing, these were tempered by declines in adjusted EBITDA and net income, as well as challenges posed by Tropical Storm Sarah and the ongoing strategic review of the fresh vegetables segment.
Revenue Growth and Strong Performance
Dole Plc reported a 4.2% increase in group revenue, reaching $2.1 billion on a like-for-like basis. This growth was primarily driven by the diversified fresh produce segments, which performed well and helped offset challenges faced in the fresh fruit sector.
Dividend Increase
In a move that reflects confidence in its long-term growth prospects, Dole Plc announced a 6.25% increase in its dividend, raising it to $0.085 per share. This marks the first dividend increase since 2021, signaling a positive outlook for the company’s future.
Successful Refinancing
The company successfully completed a $1.2 billion refinancing of its credit facility at favorable rates. This strategic move provides Dole with enhanced financial flexibility, positioning it well for future growth and investment opportunities.
Positive Performance in Diversified EMEA
The diversified EMEA segment saw a 9.4% increase in adjusted EBITDA on a like-for-like basis, despite facing foreign exchange headwinds. This growth was driven by strong performances in key markets such as the UK, Spain, and the Netherlands.
Strong Start for Diversified Americas
The Americas segment experienced double-digit growth in EBITDA on a like-for-like basis, bolstered by robust performance in the North American market, particularly in kiwis, citrus, and avocados.
Decrease in Adjusted EBITDA
Adjusted EBITDA decreased by 2% to $104.8 million, a decline attributed in part to higher sourcing and shipping costs following the impact of Tropical Storm Sarah.
Impact of Tropical Storm Sarah
The fresh fruit segment faced significant headwinds due to Tropical Storm Sarah, which resulted in higher sourcing costs and operational challenges, affecting overall performance.
Net Income Decline
Net income for the period was $44.2 million, representing a decrease of $21.3 million year-on-year. This decline was impacted by the absence of the prior year’s exceptional gain from the progressive produce disposal.
Challenges in Fresh Vegetables Segment
The fresh vegetables segment underperformed against a strong comparative period, with the ongoing strategic review yet to reach a conclusion. This segment continues to face challenges that need addressing.
Forward-Looking Guidance
Looking ahead, Dole Plc provided updated guidance for the fiscal year 2025, projecting a full-year adjusted EBITDA of at least $380 million. This projection reflects increased confidence based on a strong first quarter performance. Despite a slight decline in adjusted EBITDA due to Tropical Storm Sarah, the company remains optimistic about robust demand and potential tailwinds from the strengthening Euro.
In summary, Dole Plc’s earnings call presented a mixed sentiment, with positive developments in revenue growth, dividend increase, and refinancing, countered by challenges in adjusted EBITDA and net income. The company remains optimistic about future growth, supported by strategic initiatives and market demand, despite facing ongoing challenges in certain segments.