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Fyffes sees big savings from merger

Wednesday, August 27 10:09:06

Irish fruit importer, Fyffes, today said it has identified an extra $20m in annual savings from their proposal to join forces to create the world's biggest banana company, Chiquita.

Also today, Fyffes said its pre-tax profit rose to E31m in the first half of 2014, according to its latest results, up 40pc on the same period of last year.

The company said group revenue was 3pc higher in the six months at E490.2m with total revenue - including joint ventures - up 1.3pc to E592.8m.

This put Fyffes’ earnings before interest, tax and amortisation at E31.5m - up 36.5pc on the first half of 2013.

As a result, the company said it would increase its full year target for EBITA to the E38m-E42m range, compared to E32.7m last year.

Fyffes and Chiquita said the merger would result in $60m in savings a year, up from a previous estimate of $40m.

The companies said the extra savings were identified in areas such as shipping and information technology. The announcement comes after Brazilian juice company Cutrale Group and Brazilian investment firm Safra Group earlier in August tried to thwart the offer with a $625m offer for Chiquita. Chiquita rejected the Brazilian offer.

"As a result of our diligent and thorough integration planning efforts, Chiquita and Fyffes have identified an additional $20m of synergies that will allow ChiquitaFyffes to deliver even more value for our shareholders and result in a combined company with stronger earnings power," said Ed Lonergan, Chiquita's Chief Executive, and David McCann, Fyffes' Executive Chairman.

"Chiquita and Fyffes remain committed to the transaction and are continuing to work together to complete the Combination as expeditiously as possible," they added.

Fyffes also increased its full year earnings before interest, taxation and amortization, or Ebitda, target to E38m-E42m from E30m-E35m.

The company's revenue for the six months ended June 30 rose to E592.8m from E585.4m in the same period last year. Net profit rose to E18.6m from E18.4m.

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