Dole (DOLE) Q2 Earnings call transcript Aug 14, 2024

In the latest earnings call, Dole PLC reported another strong quarter for its business, highlighting a consistent performance across its various segments and geographies. The company's management expressed confidence in its ability to deliver a strong result for the full year, raising its adjusted EBITDA target to at least $370 million for 2024.

Financial Highlights

Dole PLC's reported revenue for the second quarter of 2024 was in line with the previous year, but on a like-for-like basis, excluding the impact of disposals and foreign exchange, revenue increased by 4.3%. Adjusted EBITDA also increased by 2.3% to $125.4 million, with a particularly strong performance in both the fresh foods and diversified first produce Americas segments. The fresh finish fees business also contributed significantly to the increase in net income, which stood at $88.1 million, up from $52.3 million in the prior year.

Operational Highlights

The company's largest segment, fresh foods, delivered a very strong performance, with adjusted EBITDA of $70.6 million, 7.3% ahead of the prior year. Dole PLC's proactive cost management strategies, particularly in its European and North American markets, have contributed to this positive outcome. Despite challenges such as supply shortages and currency fluctuations, the company remains optimistic about its future performance, particularly in the North American and European markets.

The diversified EMEA segment also reported a good stable performance, with revenue growth driven by higher pricing and a positive contribution from all regions. The diversified Americas segment, particularly in the South American export side, is expected to deliver strong results in the second half of the year, thanks to the transition to winter season products and improved performance in the North American diversified business.

Strategic Initiatives

Dole PLC is actively exploring strategic alternatives for its fresh vegetables business, which has shown some good earnings in discontinued operations. The company is seeking the best possible outcome in the interest of its stakeholders while maintaining a keen focus on the day-to-day running of the business. The fresh pack business has been a standout performer, benefiting from favorable market conditions, and the value business has also made important progress on an underlying basis.

Outlook and Future Plans

Looking ahead, Dole PLC remains focused on capital allocation and managing its leverage, with a reduction in leverage to 1.9x at the end of Q2. The company expects total capital expenditure in the range of GBP 110 million to GBP 120 million for the full year, with investments in shipping containers, efficiency projects, and the expansion of processing capacity in some of its Chilean facilities. Following the sale of Progressive produce in March, Dole PLC used the proceeds to repay term loans, contributing to lower debt levels and a decrease in interest expense.

Conclusion

Dole PLC's strong second quarter performance and enhanced full-year target indicate a company well-positioned for continued growth. The company's focus on cost management, strategic initiatives, and capital allocation have contributed to its positive outlook. With a diverse range of activities across various geographies and sources, Dole PLC is well-equipped to navigate the complexities of the global market and maintain its competitive edge.