Dole, a leading fruit and vegetable supplier, has announced that it is “well placed” to address any potential disruptions caused by the El Niño weather event. The Dublin-based company has adjusted its profit guidance and expects an adjusted EBITDA of at least $350m for the full year.
The second quarter of 2023 saw Dole’s adjusted EBITDA rise by 9.7% to $122.7m, bringing the year-to-date metric to $223.1m, a 9.5% increase. These results align with Dole’s earlier projection of achieving $350m in EBITDA for the year.
During discussions about the latest financial figures, Dole CEO Rory Byrne expressed confidence in their ability to deal with potential challenges arising from El Niño. He stated, “We are closely monitoring the changing weather patterns and believe that our diverse sourcing network and advanced farming practices will allow us to overcome potential disruptions in our key growing regions in Central and South America.”
Addressing concerns about the impact on production, Dole’s Chief Operating Officer Johan Linden referred to previous El Niño events in the 1990s and 2015/16. He explained, “We have a highly experienced team that has already dealt with the effects of El Niño in the late ’90s. We have prepared infrastructure and agricultural practices to handle adverse weather conditions, minimizing the potential impact on our banana segment and other areas.”
Linden also highlighted Dole’s strong margin position, with the second quarter seeing a 20 basis point increase in adjusted EBITDA margin to 5.7%. The company’s revenue also rose by 4.4% to $2.1bn. He emphasized Dole’s diversified sourcing network and shipping setup, which allows them to handle potential volume decreases better than the industry at large.
When questioned about the recent heatwave in Europe, CEO Byrne reassured investors that Dole does not anticipate a significant impact. While certain categories of supply in northern and southern Europe may be affected, Dole is confident in its ability to navigate these challenges.
Despite an evolving market environment and ongoing inflationary pressures in Europe, Dole remains optimistic. Byrne noted, “We are pleased with the improved pricing environment and favorable selling conditions, although it remains a challenge to offset all inflationary pressures. Nevertheless, we are seeing signs of inflation moderating.”
