Fyffes Posts €170m Loss Amid Asset Charges
Fyffes swung into a record loss of almost €170 million last year. It was forced to take hefty impairment charges against its melon and mushroom businesses amid the Covid-19 pandemic and group restructuring.
The Dublin-based - but Japanese-owned - company also disclosed in its latest annual report, filed with the Companies Registration Office recently, that its long-standing executive chairman David McCann and finance director Tom Murphy shared €7.46 million in exit payments they left the company last year.
The loss for 2020 compared with an almost €20 million profit for the previous year. It was driven as the Fyffes took a €62.8 million impairment charge against its Canadian mushrooms assets before selling the unit, called Highline Produce Ltd, to its immediate parent Summit Fresh Produce Ltd for a nominal one Canadian dollar.
Tokyo-based conglomerate Sumitomo bought Fyffes four years ago in a €751 million deal, ending the company's 35 years on the Irish stock market. The Japanese group holds the investment through Summit Fresh Produce.
Fyffes, best known for its banana, melon and pineapple distribution operations, ventured into the North American mushroom business in April 2016 through its acquisition of Highline Produce in a deal worth the equivalent of €97.7 million at the time. It followed up months later with the €40 million purchase of another Canadian firm, All Seasons Mushroom, and carried out other deals growing the business under Sumitomo.
A spokeswoman for Fyffes said that a review of the mushroom business determined that it should be managed separately as it is "fundamentally different" to the tropical fresh produce operation, "requiring a different approach to farming, production, financing and marketing". Some €147.3 million of Highline loans to Fyffes subsidiaries were repaid in March 2021, according to the company. Summit's separate accounts show that it pumped 189.7 million Canadian dollars (€127.2 million) into Highline around the same time, having received a capital injection from a Cayman-based company higher up the corporate tree.
Fyffes said that its US melon unit was most severely affected by the onset of the Covid-19 crisis last year, as it coincided with a crucial part of the import season from Guatemala and Honduras in Central America. A slump in demand for melons resulted in "significant levels of dumping in both production regions and the US". The group booked a €21.3 million impairment charge against this business last year. In addition, it took a €35 million hit against a European banana distribution, "reflecting, in particular, the loss of certain key customers and more uncertain trading conditions".
In July last year, Mr McCann retired as executive chairman of Fyffes, with Helge Sparsoe, a former chief operating officer with Chiquita, joining the firm as chief executive.
Mr McCann, the grandson of Charles McCann - who laid the foundations for the group when he opened a fruit and vegetable shop in Dundalk in 1902 - joined Fyffes in 1985. Mr Murphy joined the group in 1990 and held several senior accounting roles before being appointed to the board as finance director in 2007. He resigned last November.