Fresh Del Monte Produce Inc. Aktie

Welcome to Fresh Del Monte Produce's 2026 Annual General Meeting of Shareholders. Today's Annual General Meeting is being broadcast live over the Internet and is being recorded. For opening remarks, I would like to turn today's call over to Christine Cannella, Vice President, Investor Relations with Fresh Del Monte Produce, who will serve as the moderator for today's Annual General Meeting of Shareholders. Please go ahead, Ms. Cannella.

Thank you, operator. Good morning, everyone, and welcome to Fresh Del Monte Produce's 2026 Annual General Meeting of Shareholders. As the operator mentioned, I'm Christine Cannella, Vice President, Investor Relations with Fresh Del Monte Produce. I will be moderating today's call. Today's annual meeting is being broadcast live over the Internet, and we thank you for participating in the virtual meeting. I hope you had a chance to review the annual report and the proxy statement. If not, they are available at www.envisionreports.com/FDP or at www.freshdelmonte.com, under the Investor Relations tab.

If you haven't already done so, please take a minute to view our agenda slide and the rules of conduct for today's annual meeting. We will hold a Q&A session during which we intend to answer, as time permits, those questions submitted during the meeting that are pertinent to the items being brought before the shareholders for vote today in accordance with our rules of conduct. [Operator Instructions].

As a reminder, if you have already voted your shares by sending in a proxy or voted via telephone or Internet, you do not need to take any further action. If you have not already voted your shares in advance, you will be able to vote your shares electronically during today's Annual General Meeting by clicking on the Cast Your Vote link on the meeting center site.

If you have technical issues during today's webcast, please click on the support link in the upper right of the broadcast screen, and someone will assist you. With that, I would like to turn today's call over to our Chairman and Chief Executive Officer, Mohammad Abu-Ghazaleh. Please go ahead, Mr. Abu-Ghazaleh.

Thank you, Mrs. Cannella. Good morning, and welcome to the 2026 Annual General Meeting of Shareholders of Fresh Del Monte Produce. As Mrs. Cannella mentioned, I am Mohammad Abu-Ghazaleh, Chairman of the Board and Chief Executive Officer of Fresh Del Monte Produce, and I will be presiding at this Annual General Meeting. I want to open by thanking all of you who have joined us today.

At this time, we will move to the formal portion of our meeting, and I will call the meeting to order. Present at the meeting today via telephone are directors, Amir Abu-Ghazaleh and Ahmad Abu-Ghazaleh; and our independent directors, Charles Beard, Jr.; Mary Ann Cloyd, Lori Tauber Marcus, Dr. Ajai Puri and Michael Berthelot, our Lead Independent Director. Other company officers in attendance via telephone are Mrs. Monica Vicente, Senior Vice President and Chief Financial Officer; and Mrs. Effie D. Silva, Senior Vice President, General Counsel, Corporate Secretary. Ms. Silva will serve as Secretary of today's meeting.

As you heard earlier, joining today's meeting and serving as moderator for today's meeting is Mrs. Christine Cannella with Fresh Del Monte Produce. Mr. [ Shawn Sharp ], a representative of Computershare is also on today's call. Mr. Sharp has been appointed to act as the Inspector of Elections for today's meeting. Mr. Mark Garces, Assurance Partner with Ernst & Young, is also present via telephone at today's meeting. The Secretary has delivered an affidavit of mailing establishing that notice of this meeting was duly given.

A copy of the notice of meeting and the affidavit of mailing will be incorporated into the minutes of this meeting. All shareholders of record at the close of business on April 13, 2026, are entitled to vote at this meeting. Our first order of business at this meeting is to determine whether the ordinary shares represented at the meeting are sufficient to constitute a quorum for the purpose of transacting business. Mrs. Silva, do you have a report, please?

Yes. The shareholders' list shows that holders of 47,531,139 ordinary shares of the company are entitled to vote at this meeting. We are informed by Mr. Sharp, Inspector of Election, that 44,776,276 of the issued ordinary shares of the company or approximately 94% of the total issued ordinary shares of the company are entitled to vote at this meeting.

Thank you, Ms. Silva. Based upon the percentage of total ordinary shares of the company held by holders of record now present at the meeting, either in person or represented by proxy, a quorum is present. This meeting is now duly convened for purposes of transacting such business properly before it. The next order of business is a description of the matters to be voted on at today's meeting. The first proposal before the shareholders of the company is the election of 2 directors to serve a 3-year term expiring at the Annual General Meeting of Shareholders in 2029.

The Board of Directors recommends a vote for the election of the following director nominees: Michael J. Berthelot, Lori Tauber Marcus. Proposal #2, ratify the appointment of Ernst & Young LLP as independent registered certified public accounting firm for the 2026 fiscal year. The Board of Directors recommends a vote for the ratification of the appointment of Ernst & Young LLP as the company's independent registered public accounting firm for the 2026 fiscal year.

Proposal #3, approval by nonbinding advisory vote of the compensation of our named executive officers as disclosed in the proxy statement for the 2025 fiscal year. The Board of Directors recommends a vote for the approval of the company's executive compensation.

Proposal #4, approval and adoption of the third amended and restated memorandum and Articles of Association. The Board recommends a vote for the approval of the company's third amended and restated memorandum and Articles of Association. I will now turn the call over to Mrs. Christine Cannella to begin the question-and-answer session regarding the proposals. Mrs. Cannella?

[Operator Instructions] For all other inquiries regarding Fresh Del Monte Produce, please feel free to reach out to me directly. I would like to remind you that the answers we give in response to your questions may include forward-looking statements within the safe harbor provisions of the federal securities laws.

Actual results may differ materially from these forward-looking statements because of a variety of risks and uncertainties about our business, which are described in our most recent filings with the SEC, including our 2025 annual report on Form 10-K. All forward-looking statements are as of today, June 4, and we assume no obligation to update such statements. Mr. Chairman, there are no questions. This concludes the question-and-answer session of Fresh Del Monte Produce's Annual General Meeting.

The inspector of election will now look for any outstanding votes that may have been cast during the meeting. The online voting will now be closed, and I hereby declare the polls closed. Proxies will be held in the position of the inspector of election. The inspector of election will tabulate the votes. Will the secretary please report the preliminary results of voting?

We have been informed by the inspector of election that the votes have been counted and that the preliminary results of the voting are as follows: the nominees for election to the Board of Directors have been duly elected. The appointment of Ernst & Young as independent registered certified public accounting firm for the 2026 fiscal year has been ratified.

The company's executive compensation for the 2025 fiscal year has been approved and the adoption of the company's third amended and restated memorandum and Articles of Association has been approved. The results of the voting on these items will be reported in a Form 8-K filing by the company within 4 business days after the final voting results are tabulated.

Thank you, Mrs. Effie, and the 2026 Annual General Meeting of Shareholders is adjourned. Thank you for joining us. I will now turn today's meeting back to our operator.

Thank you, Mr. Abu-Ghazaleh. Today's webcast has concluded. You may disconnect at this time.

Good day, everyone, and welcome to Fresh Del Monte Produce First Quarter 2026 Conference Call. Today's call is being broadcast live over the Internet and is also being recorded for playback purposes. [Operator Instructions] Thank you.

For opening remarks and introductions, I would like to turn today's call over to the Vice President, Investor Relations with Fresh Del Monte Produce, Ms. Christine Cannella. Please go ahead, Ms. Cannella.

Thank you, Krista. Good day, everyone, and thank you for joining our first quarter 2026 conference call.

Joining me in today's discussion are Mr. Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer; and Ms. Monica Vicente, Senior Vice President and Chief Financial Officer.

I hope that you have had a chance to review the press release that was issued earlier via Business Wire. You may also visit the company's IR website at investorrelations.freshdelmonte.com to access today's earnings materials and to register for future distribution. This conference call is being webcast live on our website and will be available for replay after this call.

Please note that, our press release and our call today include non-GAAP measures. Reconciliations of these non-GAAP financial measures are set forth in the press release and earnings presentation, which is available on our website.

I would like to remind you that much of the information we will be speaking to today, including the answers we give in response to your questions, may include forward-looking statements within the safe harbor provisions of the federal securities laws.

In today's press release and our SEC filings, we detail risks that may cause our future results to differ materially from these forward-looking statements. Our statements are as of today, May 5, 2026, and we have no obligation to update any forward-looking statements we may make.

During the call, we will provide a business update, along with an overview of our financial results, followed by a question-and-answer session

With that, I will turn today's call over to Mr. Mohammad Abu-Ghazaleh. Please go ahead.

Thank you, Christine. Good morning, everyone, and thank you for joining us. Following up on our last quarter, we reached an important milestone this quarter with the closing of the Del Monte Foods transaction, bringing the brand back under a single owner for the first time in nearly 4 decades. The quarter included approximately 1 week of contribution from the acquired business. So the financial impact in the quarter is limited due to timing.

We are encouraged by the initial performance of the Del Monte Food business, and we see clear opportunity as we begin to thoughtfully scale the business and believe there is a meaningful opportunity to realize the full potential of these assets.

As I mentioned during our last call, this acquisition is not expansion for expansion's sake. It's alignment, bringing the brand, the portfolio and the platform back under a single focused owner. This acquisition not only reunites one of the oldest and most recognized brands in the world, but it also positions us to operate from a more complete platform, expanding our presence across both the perimeter and center of the store and allowing us to offer customers a broader, more integrated portfolio.

Our priority during this early phase remains continuity, ensuring stability for customers, partners and employees, while taking a disciplined approach to evaluating the business and identifying where we see the strongest opportunities.

We are focused on strengthening the platform, prioritizing key customer relationships and building a more focused, high-quality portfolio over time.

It is important to dedicate a portion of today's call to discuss the broader environment shaping our business, the industry and the global food system.

The conflict in the Middle East has introduced a meaningful shock across key input fundamentals to food production, energy, fertilizers, packaging and transportation. There is no part of agriculture that is not energy dependent from inputs to packaging to transportation. As a result, movements in energy costs do not remain isolated. They cascade through the entire system.

Agriculture does not operate in real time. The timing of impact varies meaningfully by category. In crops like pineapples, for instance, where production cycles extend to approximately 18 months, the inputs being deployed today will be reflected in cost and pricing later this year. Bananas by contrast, move more quickly through the system and therefore, respond more immediately to changes in input costs.

As a result, the pressures that emerged during the quarter are now embedded in the system and will continue to move through the value chain in the periods ahead, regardless of how conditions in the Middle East evolve from here.

We are already seeing this dynamic take hold from higher fertilizers and packaging costs to increase ocean freight and inland transportation driven by fuel and labor. The impact is more pronounced in our fresh business given its production cycles and input intensity, while other parts of the portfolio are affected differently based on their supply chain structures.

This is not a short-term volatility. It's a natural transmission of input costs through a global time lag system. The situation remains dynamic, and we are managing the business with discipline and flexibility. This is an environment we are well positioned to navigate, but it will not be without challenges. We expect pressure to build in the coming quarters, particularly in the second and third quarter, as these costs continue to flow through the system and the full impact move through the value chain.

Our global footprint, diversified sourcing and integrated supply chain enable us to adjust and respond across markets. While our scale and disciplined execution position us to manage through this period effectively, these are the conditions where those advantages become more evident. We have navigated complex operating environments before, and we will continue to do so with clear focus on execution, cost management and operational efficiency.

With that, I will turn it over to Monica Vicente, our CFO, to discuss our financial results.

Thank you, Mr. Abu-Ghazaleh, and thank you, everyone, for joining us this morning. I will begin with our first quarter results and then share our expectations for the year ahead. I will cover key items affecting comparability, most notably the Del Monte Foods acquisition and updates to our segment reporting structure.

We closed the Del Monte Foods acquisition late in the quarter. Results include 1 week of contribution and have no meaningful impact on the first quarter results. We are assessing the cost structure and spending profile to establish a near-term cost baseline while identifying efficiency opportunities we expect to execute over time.

We are also evaluating the operating footprint, including a recent purchase of a warehouse previously leased by Del Monte Foods in Wisconsin with a focus on optimizing asset utilization and portfolio alignment across our facilities.

We paid a total cash consideration of $308 million, which included $285 million base purchase price plus $23 million in cash, representing wind-down and closing costs, along with adjustments for working capital associated with the transaction.

The acquisition was funded through a combination of cash on hand and borrowings under our revolving credit facility. The consideration closely approximated the fair value of the identifiable net assets acquired. The acquisition is expected to be accretive to net sales by $600 million and adjusted EBITDA by approximately $23 million in 2026 as operations normalize.

As a result of the acquisition, beginning this quarter, we updated our business segment reporting to better align with internal management reporting. A new reportable segment, Prepared Foods, combines the Del Monte Foods business acquired with our existing Prepared Foods operations.

Prior period segment information has been recast for comparability. We also completed the previously announced divestiture of Mann Packing in December 2025.

Our first quarter results reflect continuing operations. Prior period comparisons are presented as reported and where applicable on an adjusted basis with reconciliations in today's earnings press release.

With that context, I will turn now to our first quarter financial performance. Year-over-year results reflect portfolio changes following the divestiture of Mann Packing, alongside pricing, volume, cost and foreign exchange dynamics, as well as the recent geopolitical developments.

Net sales were $1 billion, primarily driven by lower net sales in our fresh and value-added products segment. This reflected the divestiture of Mann Packing and lower net sales in our avocado product line due to industry-wide oversupply, which resulted in lower per unit selling prices. The decrease was partially offset by the initial contribution of Del Monte Foods and the favorable impact of fluctuations in exchange rates, primarily the euro.

Gross profit was $89 million, reflecting lower gross profit in our other products and services and Prepared Foods segment, where results were impacted by lower selling prices in our poultry and meats business due to softer demand and the conflict in the Middle East.

In our Prepared Foods segment, higher per unit production costs weighed on results. Gross profit was generally affected by supply chain disruptions in the Strait of Hormuz and the unfavorable impact of a stronger Costa Rica colon. These impacts were partially offset by higher per unit selling prices in our banana and pineapple product lines, as well as the contribution of Del Monte Foods.

Gross margin increased to 8.5%. Adjusted gross profit was $91 million and adjusted gross margin was 8.7%. Operating income was $20 million, primarily driven by higher asset impairment and other charges net.

Adjusted operating income was $40 million. Asset impairment and other charges were related to the Foods acquisition.

Income from equity method investments was $7 million. The increase reflected higher equity earnings from unconsolidated investments, primarily from distributions received in excess of our carrying value upon the liquidation of a fund in which we previously held an interest.

Fresh Del Monte net income was $10 million. And on an adjusted basis, Fresh Del Monte net income was $30 million. We delivered earnings per share of $0.21 and adjusted earnings per diluted share of $0.63.

Adjusted EBITDA was $58 million, with a margin of 6% as a percentage of net sales, reflecting disciplined cost management amid a dynamic cost environment.

I will now go into more detail on the quarter performance for each of our business segments, starting with our fresh and value-added products segment.

Net sales were $549 million, primarily driven by strategic reductions in our fresh and fresh-cut vegetable product lines, reflecting the divestiture of Mann Packing, as well as lower per unit selling prices in our avocado product line driven by industry-wide oversupply. These declines were partially offset by higher net sales in our pineapple product line, reflecting higher per unit selling prices and the favorable impact of exchange rate movements, primarily the euro.

Gross profit was $60 million, driven by the divestiture of Mann Packing, which generated negative gross profit in the prior year, as well as higher per unit selling prices in our pineapple product line. The increase was partially offset by higher per unit production costs as well as weather-related events in North America that negatively impacted sales volume in our fresh-cut fruit product line and contributed to lower per unit selling prices in our melon product line. Gross margin increased to 10.9%. Adjusted gross profit was $61 million.

Turning to our banana segment. Net sales were $357 million, primarily driven by lower volume and market disruptions across regions, including adverse weather and supplier changes. The decrease was partially offset by higher per unit selling prices across all regions and the favorable impact of fluctuations in exchange rates.

Gross profit was $16 million, driven by higher per unit production and procurement costs, partially offset by higher per unit selling prices. Gross margin was in line at 4.6%. Adjusted gross profit was $18 million and adjusted gross margin increased to 5%.

Moving to our Prepared Foods segment. Results reflected 1 week of contribution from the Fresh Del Monte Foods acquisition, along with contributions from our existing Prepared Foods operations. Net sales were $83 million, including $22 million of net sales from the acquisition, partially offset by lower net sales in Europe due to supply availability constraints of pineapple used in our canned pineapple product line.

Gross profit was $9 million, primarily driven by lower net sales in Europe and higher per unit production and distribution costs. Gross margin decreased to 10.8%.

Lastly, our results for other products and services segment. Net sales were $56 million, driven by higher net sales of our third-party freight services business, partially offset by lower net sales in our poultry and meats business due to lower per unit selling prices. Gross profit was $4 million and gross margin decreased to 6.8%.

Now moving to selected financial results for the first quarter of 2026. Our income tax provision was $8 million, reflecting changes in the global tax and regulatory environment and higher earnings in certain jurisdictions. Net cash provided by operating activities was $44 million.

Cash flow was primarily driven by net earnings and partially offset by higher noncash items, including asset impairments as well as working capital movements, mainly lower inventory levels and higher trade receivables due to the timing of period-end collections.

Turning to capital allocation. At the end of the first quarter, long-term debt stood at $438 million, and our average adjusted leverage ratio is at 1.4x EBITDA. This compares to $173 million in long-term debt at year-end, with the increase reflecting the closing of the Del Monte Foods acquisition.

Capital expenditures totaled $14 million during the quarter, reflecting pineapple expansion and packing facility construction in Costa Rica, equipment investments in Kenya and the replacement and maintenance capital.

As previously announced, our Board of Directors declared a quarterly cash dividend of $0.30 per share payable on June 11, 2026, to shareholders of record as of May 19, 2026. On an annualized basis, this equates to $1.20 per share, representing a dividend yield of approximately 3% based on our current share price.

During the quarter, we repurchased 100,000 shares of our common stock for $4 million at an average price of $40.24 per share. As of March 27, we had $116 million available under our $150 million share repurchase program.

Together, our capital allocation actions during the quarter, including dividends, share repurchases and the completion of the Del Monte Foods acquisition reflect our balanced approach to capital deployment. We continue to prioritize reinvestment in the business and a competitive, reliable return to shareholders.

Turning to our outlook for the full year of 2026. We are providing our expectations for our business segments and key financial priorities, including SG&A, capital expenditures and cash flows. This outlook is based on the information available to us today and our experience managing through comparable industry and macroeconomic cycles.

Given the current environment, our priorities for 2026 are clear: first, protecting the long-term earnings power of the portfolio; second, maintaining balance sheet and liquidity flexibility; and third, managing through near-term volatility with discipline.

Our 2026 outlook reflects Fresh Del Monte's continuing operations. It excludes the Mann Packing business exited in December 2025 and includes 9 months of contribution from Del Monte Foods transaction.

We expect net sales on a continuing operation basis to increase between 13% and 15% year-over-year, reflecting execution across our base business and the contribution from the Del Monte Foods transaction, which we expect will contribute $600 million of net sales in 2026.

As discussed, developments in the Middle East have driven higher energy, shipping and commodity input costs. Based on current assumptions and observable market conditions, we estimate the impact of these cost pressures to be approximately $40 million to $45 million, which will impact us starting in the second quarter. These impacts are primarily related to ocean freight costs, including bunker fuel and war-related surcharges, inland transportation, fertilizer and packaging costs, consistent with recent elevated oil and fuel price trends.

Our outlook also reflects approximately $20 million to $25 million of headwinds over the balance of the year, roughly 50% from foreign exchange impacts, primarily related to the Costa Rica colon and the remainder driven by higher domestic transportation and logistic costs resulting from shortage of -- of driver availability in the U.S.

Separately, tariffs implemented beginning in March 2025 continue to function largely as a pass-through. Tariffs had a modest impact in the first quarter. And given the uncertainty around recoverability and timing, we have not assumed any tariff refunds.

In banana, near-term industry supply and cost dynamics, combined with trade dislocations following Middle East-related disruptions are creating incremental volume pressure in North America and Europe markets, which is reflected in our guidance. At the same time, per unit costs are higher, driven by lower production from Costa Rica and the disease management efforts on our own farms. Fertilizer inflation has added further pressure. These headwinds are reflected in the segment gross margin ranges we are providing today.

Consistent with our established cost management approach, our outlook reflects a disciplined and active response to the current environment. This includes targeted pricing actions where market and customer dynamics support them, contractual fuel recovery mechanisms and continued focus on cost containment and operational efficiency.

Just as important, it reflects ongoing deliberate trade-offs around timing, mix and service to protect customer relationships, sustain throughput and preserve long-term earning capacity during a period of elevated volatility.

Turning to gross margin expectations by segment. In our fresh and value-added products segment, we expect gross margin to be in the range of 11% to 12% compared with 14% last year. This reflects higher per unit production and distribution costs across the segment as well as industry-wide supply constraints in pineapple volumes that limit our ability to fully benefit from increased market demand from our premium pineapple varieties.

In our banana segment, we expect gross margin to be in the range of 3% to 4%, consistent with the cost supply and market dynamics discussed before.

In our Prepared Foods segment, we expect gross margin to be in the range of 13% to 14%. This reflects the combination of Del Monte Foods transaction, which brings an inherently higher-margin branded CPG profile with our existing Prepared Foods operations as well as integration, timing, input cost volatility, and mix across geographies.

Importantly, the reported range does not yet reflect the full margin potential of the Del Monte Foods platform as integration progresses. In our other products and services segment, we expect gross margin to be in the range of 12% to 13%, consistent with prior years.

Selling, general and administrative expense is expected to be in the range of $270 million to $280 million, reflecting the inclusion of Del Monte Foods and our intentional shift to a branded CPG operating model, which carries a higher SG&A profile than our historical fresh produce operations. This range also includes wage inflation and targeted investments in technology and organizational support to operate and scale a global branded foods platform.

Capital expenditures for the full year are expected to be in the range of $85 million to $95 million, focused on production expansion in Central America, growth in our fresh cut and Prepared Foods operations in Europe, a recent warehouse investment and other investments related to the Del Monte Foods acquisition as well as investments in core technology systems.

For the full year, we expect net cash provided by operating activities to be in the range of $40 million to $50 million, which reflects lower cash generation than we historically produced as a pure fresh produce company.

With the addition of Del Monte Foods, our cash profile now reflects the seasonal working capital dynamics of a branded CPG business. This includes higher working capital requirements in the second and third quarters as inventories are built to support seasonal packing and processing activities that ramp through the harvest season and peak from summer through fall.

As those inventories convert to sales, we expect stronger cash generation in the fourth quarter and into the first quarter, driven by peak demand during November and December holiday season and again around the Easter holiday period. Due to the timing of the acquisition, working capital needs will be higher in 2026 than in future periods.

In summary, while the operating environment remains challenging, we believe the underlying fundamentals of our portfolio are sound, and our focus remains on disciplined execution, prudent capital allocation, protecting long-term value, consistent cash generation across the full operating cycle and maintaining flexibility and financial resilience as conditions evolve.

This concludes our financial review. We can now turn the call over to Q&A. Krista?

[Operator Instructions] And we have no questions at this time. I would like to turn the conference back over to Mr. Mohammad Abu-Ghazaleh for closing comments.

Thank you, Krista, and thank you everyone for joining us today, and hope to speak with you on our next call of the second quarter. Thank you, everyone, and have a good day.

Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.

Good day, everyone, and welcome to Fresh Del Monte Produce's Fourth Quarter and Full Fiscal Year 2025 Conference Call. Today's conference call is being broadcast live over the Internet and is also being recorded for playback purposes. [Operator Instructions]

For opening remarks and introductions, I would like to turn today's call over to the Vice President, Investor Relations with Fresh Del Monte Produce, Ms. Christine Cannella. Please go ahead, Ms. Cannella.

Thank you, Kate. Good morning, everyone, and thank you for joining our fourth quarter and full fiscal year 2025 conference call. Joining me in today's discussion are Mr. Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer; and Ms. Monica Vicente, Senior Vice President and Chief Financial Officer. I hope that you had a chance to review the press release that was issued earlier via Business Wire. You may also visit the company's IR website at investorrelations.freshdelmonte.com to access today's earnings materials and to register for future distributions.

This conference call is being webcast live on our website and will be available for replay after this call. Please note that our press release and our call today include non-GAAP measures. Reconciliations of these non-GAAP financial measures are set forth in the press release and earnings presentation, which is available on our website. I would like to remind you that much of the information we will be speaking to today, including the answers we give in response to your questions, may include forward-looking statements within the safe harbor provisions of the federal securities laws.

In today's press release and in our SEC filings, we detail risks that may cause our future results to differ materially from these forward-looking statements. Our statements are as of today, February 18, 2026, and we have no obligation to update any forward-looking statements we may make. During the call, we will provide a business outlook, along with an overview of our financial results, followed by a question-and-answer session.

With that, I will now turn today's call over to Mr. Mohammad Abu-Ghazaleh. Please go ahead.

Thank you, Christine. Good morning, everyone, and thank you for joining us. Fiscal 2025 marked a clear inflection point for Fresh Del Monte. It was not just a year of performance, it was a year of preparation. Our results this quarter underscores a fundamental shift in our approach for the past 2 years. We have moved from a broad market strategy to a relentless focus on our core strengths.

By streamlining our portfolio and divesting from noncore distractions, we have ensured that our best-performing categories receive the capital and focus they deserve. This strategic narrowing is supported by a culture of rigorous financial discipline and accountability. Rather than pursuing scale indiscriminately, we have prioritized operational efficiency and high-return investments. Together, those choices strengthened our balance sheet, expanded margins and generated the cash flow needed to preserve flexibility and reinvest for long-term leadership.

Those choices were deliberate. They were about focus. They were about discipline, and they were about ensuring that when the right moment arrived, we were ready to act from a position of strength. That moment is now. As many of you have been following, we are in a process of acquiring select assets from California-based Del Monte Foods through a court supervised bankruptcy process. Earlier this month, the U.S. Bankruptcy Court approved Fresh Del Monte as the purchaser of global Del Monte brand, along with select core assets. With that approval, we moved meaningfully closer to closing. We expect the transaction to close before the end of first quarter subject to customary regulatory approvals, including HSR antitrust clearance and remaining closing conditions.

This decision is not about expansion or -- for expansion sake. It's about alignment. For nearly 40 years, the Del Monte brand has existed across separate platforms. Today, we have the opportunity to unify the brand under a company with a deep agricultural roots, global operating scale and decades of experience managing complex food systems across geographies and categories. There is a strong sense internally that this feels like a reunion. For me, this moment is deeply personal. Bringing Del Monte back together has been a long-held conviction of mine. And it is coming to fruition on the 30th anniversary of when I acquired Fresh Del Monte in 1996.

I truly believe that uniting the fresh and staple food under a single strategy honors the Del Monte legacy while positioning the brand for continued relevance and growth. It allows us to show up more consistently for consumers and to build a stronger, more flexible platform focused on efficiency innovation and long-term value creation. Del Monte is 140 years old brand and one of the most recognized names in food worldwide, built on trust, quality and longevity. These are established businesses with experienced teams, strong customer relationships and products that consumers know well.

Our first priority is continuity. As we move through the remaining regulatory reviews and closing conditions, our focus is on stability for customers, retailers, partners and employees. Post closing, the acquired business will function as a dedicated unit, ensuring immediate operational continuity while we take a measured approach to integrating capabilities.

By utilizing a light touch integration strategy, the Food division will retain its autonomy to preserve its agility and customer focus. We will serve as a growth accelerator, empowering the unit with our capital resources, supply chain scale and logistic infrastructure. Our Food division teams, both commercial and production across Latin America, Europe, Africa and the Middle East will work hand-in-hand with our Food division in North America to expand and leverage on the capabilities of each other.

Fresh Del Monte has spent decades operating at global scale across fresh and value-added categories. This experience give us confidence not just in completing this transaction, but in managing what comes next. We see a clear opportunity to build a more unified platform that supports durable long-term value creation. As we look ahead to 2026, our priorities remain clear, disciplined decision-making, thoughtful capital allocation and execution anchored on our core strength.

With that, I will turn over to Monica to discuss our financial results.

Thank you, Mr. Abu-Ghazaleh, and thank you, everyone, for joining us today. Before getting into the financial results, I would like to highlight several important developments.

First, as Mr. Abu-Ghazaleh mentioned, we recently received court approval to pursue the acquisition of select assets of Del Monte Foods Corporation. The assets include the vegetable tomato and refrigerated fruit businesses, primarily under the Del Monte, S&W and Contadina brands. The transaction also includes global ownership of the Del Monte brand and related intellectual property subject to existing licensing agreements.

Operationally, we expect to acquire 4 facilities in the United States, 2 facilities in Mexico and 1 operation in Venezuela as well as related customer and supplier contracts and inventory at closing. The purchase price is $285 million plus the assumption of certain liabilities. The transaction remains subject to HSR antitrust clearance with closing expected in the first quarter.

Given the court supervised nature of the process and the carve-out of assets from an integrated business, it is premature to comment on accretion, synergies or fair value at this time. Details on segment reporting, expected financial contributions and integration priorities will be provided during our first quarter 2026 earnings call.

Turning to our fourth quarter. We continue to simplify and optimize our portfolio. We sold 3 older break bulk vessels as part of our ongoing efforts to modernize and rightsize our logistics footprint. As a result, our own fleet now consists of 6 modern vessels, appropriately sized to support our global supply chain while maintaining operational flexibility.

We also completed the previously announced divestiture of Mann Packing which closed in December 2025. This represents an important milestone in simplifying our portfolio and exiting a business that was no longer aligned with our long-term strategic and financial objectives. Accordingly, today's discussion will reference results both as reported and where appropriate on an adjusted basis to provide a clear view of the underlying performance of our continuing business.

Turning to our financial performance, starting with the fourth quarter. As Christine mentioned, reconciliations are available in today's press release and earnings presentation on our website. Net sales were $1.02 billion, driven by higher net sales in our Other Products and Services and Banana segments, reflecting strong demand for our third-party ocean freight business, and the Banana segment benefited from higher per unit selling prices. These gains were supported by tariff-related price adjustments in North America as well as favorable foreign exchange related to the euro. The increase was partially offset by lower net sales in our fresh and value-added segment, which was largely the result of reduced sales volume in the fresh-cut vegetable product line following the strategic operational actions we took in late 2024.

On an adjusted basis, net sales were $968 million. Gross profit was $106 million, reflecting higher gross profit across all business segments. The increase was due to higher per unit selling prices, partially offset by higher overall per unit distribution costs as well as increased production and procurement costs in our banana segment. Gross margin increased to 10.4%. Adjusted gross profit was $109 million and adjusted gross margin increased to 11.3%.

Operating income was $46 million, which was driven by higher gross profit, partially offset by lower gain on the sale of property, plant and equipment, reflecting the prior year sale of our Toronto distribution center. Adjusted operating income was $48 million. Fresh Del Monte net income was $32 million and adjusted basis Fresh Del Mante net income was $33 million. Our diluted earnings per share was $0.67 and adjusted diluted earnings per share were $0.70. Adjusted EBITDA was $67 million.

Turning to our full year 2025 financial performance. Net sales were $4.3 billion, driven by higher net sales across all our business segments. The increase reflected higher per unit selling prices in the fresh and value-added and banana segment. The effects of tariff-related price adjustments in North America as well as favorable impact from foreign exchange rates related to the euro and British pound. The increase was partially offset by lower sales volume in our fresh-cut vegetable product line following the strategic operational actions previously mentioned.

Adjusted net sales were $4.1 billion. Gross profit was $399 million, driven by higher net sales in our fresh and value-added segment. The increase was partially offset by higher per unit production and procurement costs in our banana segment, along with increased distribution costs. Gross margin increased to 9.2%. Adjusted gross profit was $427 million and adjusted gross margin increased to 10.4%

Operating income was $137 million, reflecting higher asset impairment charges related to low productivity in banana farms in the Philippines and charges related to the divestiture of Mann Packing, along with a lower gain on property disposal of property, plant and equipment. The decrease was partially offset by higher gross profit. Adjusted operating income was $222 million. Fresh Del Monte net income was $91 million, while on an adjusted basis, net income attributed to Fresh Del Monte was $178 million. Our diluted earnings per share was $1.88, and adjusted diluted earnings per share was $3.68 per share. Adjusted EBITDA was $300 million.

I will now go more into details of the full year performance for each of our business segments, starting with fresh and value-added product segment. Net sales were $2.6 billion, driven by higher per unit selling prices in our pineapples and higher per unit selling prices and sales volume in our fresh-cut product line, supported by strong market demand. Pricing also benefited from tariff-related increases in North America and favorable exchange rate from a stronger British pound. The increase was partially offset by lower net sales in our fresh-cut vegetable product lines, reflecting the previously mentioned operational changes.

Adjusted net sales were $2.4 billion. Gross profit was $299 million, driven by the higher net sales in our pineapple product line, reflecting a favorable mix of our premium pineapple varieties. The increase was partially offset by higher distribution costs. Gross margin increased to 11.4%. Adjusted gross profit was $328 million and adjusted gross margin increased to 13.7%.

Moving to our banana segment. Net sales were $1.5 billion, driven by higher per unit selling prices in North America, reflecting tariff-related adjustments and lower industry supply, supported by increased market demand and favorable foreign exchange from a stronger euro. Sales volume also improved in the Middle East as the prior year was impacted by shipment disruptions related to the Red Sea conflict. The increase was partially offset by lower sales volume in Asia due to reduced supply and softer market demand.

Gross profit was $71 million. The decrease reflects higher per unit production and procurement costs due to adverse weather in our growing regions, processes, including Black Sigatoka, higher distribution costs and an allowance recorded on our receivable from an independent grower in Asia related to low productivity. The decrease was partially offset by higher net sales. Gross margin decreased to 4.8%. Adjusted gross profit was $70 million and adjusted gross margin was 4.7%.

Lastly, our full year results for Other Products and Services segment. Net sales were $210 million, driven by higher net sales in our third-party ocean freight business, reflecting increased volume and a more favorable cargo mix as well as higher net sales in our Specialty Ingredients business. The increase was partially offset by lower net sales in our Jordan poultry and meats business due to reduced sales volume and lower per unit selling prices. Gross profit was $29 million, driven by higher net sales, partially offset by higher production costs. Gross margin decreased to 13.7%.

Now moving to select financial data for the full year 2025. Our income tax provision for the full year was $37 million, reflecting changes in the global tax and regulatory environment and higher earnings in certain jurisdictions. Net cash provided by operating activities was $245 million, driven by net earnings and changes in noncash items. Working capital movements also impacted operating cash flow, reflecting lower accounts receivable balances compared to the prior year, partially offset by lower accounts payable and accrued expenses due to the timing of customer receipts and supplier payments.

At year-end, long-term debt was $173 million, and our adjusted leverage ratio remained below 1x EBITDA. We entered 2026 with a strong capital structure that supports both our ongoing investments and the acquisition we expect to close in the first quarter. Capital expenditures for the full year totaled $64 million. Investments during 2025 focused on enhancing our banana and pineapple operations in Central America, upgrading operations and production facilities in North America and improving pineapple operations in Kenya.

As announced in our press release, our Board of Directors declared a quarterly cash dividend of $0.30 per share payable on March 27, 2026, to shareholders of record as of March 4, 2026. On an annualized basis, this equates to $1.20 per share, representing a dividend yield of approximately 3% based on our current share price.

During the year, we repurchased 866,000 shares of our common stock for $30 million at an average price of $34.44 per share. As of December, we had $120 million available under our share repurchase program. Together, our dividend policy and share repurchase activity reflect our disciplined approach to capital allocation. In addition to sustaining a competitive and reliable return to shareholders, we continue to prioritize strategic investments that support long-term growth, including the Del Monte Foods transaction. We believe this balanced approach positions us well to create long-term shareholder value.

Turning to our outlook for the full year 2026. We will share expectations for our business segments and outline our key financial priorities, including SG&A and cash flows. Our guidance reflects baseline assumptions and the information available to us today. Our 2026 outlook excludes the divested Mann Packing business, which we exited in December 2025 and does not include any contribution from the Del Monte Foods pending transaction.

As always, our guidance incorporates a range of risks and uncertainties, including macroeconomic conditions, industry dynamics and other factors outside of our control. We expect net sales on a continuing operating basis to be 1% to 2% higher for the full year, driven by higher per unit selling prices. As far as gross margin by segment, in our fresh and value-added segment, we expect gross margin to be in the range of 12% to 14%.

Demand for our premium pineapple varieties remain strong. However, industry-wide supply constraints limit our ability to fully benefit from increased market demand. In our banana segment, we expect gross margin to be in the range of 5% to 6%. This outlook reflects ongoing cost pressures, including disease management in our own farms and competitive conditions across contracted and spot fruit sourcing.

We also expect some disruption from logistic challenges, including weather-related impacts and congestion at key ports. Notably, our Q1 projections account for headwinds caused by the extreme snowfall and freezing conditions across the United States earlier this quarter. These weather events disrupted domestic distribution networks and slowed throughput at several of our primary Northern terminals in addition to shutdowns at some of our fresh-cut facilities and distribution centers during that period.

Market demand in North America and Europe remains strong. The Middle East is stable and market demand in Asia, particularly Japan and Korea continues to trend lower year-over-year. For our Other Products and Services segment, we expect gross margin to be in the range of 12% to 13%.

Moving on to our selling, general and administrative expenses. We expect to be in the range of $210 million to $215 million, reflecting wage inflation and targeted investments in technology and organizational support. For the full year, we expect net cash provided by operating activities to be in the range of $220 million to $230 million.

This concludes our financial review. We can now turn the call over to Q&A. Kate?

[Operator Instructions] Your first question comes from the line of Mitchell Pinheiro with Sturdivant & Company.

So I got a bunch of questions. First, it was -- what really stood out in the quarter to me was margins in your fresh-cut -- your value add, I should say, your value add. And I'm curious, you talked about in your guidance, a gross margin in the 12% to 14% range. The adjusted gross margin in this last quarter was 14.8%. Are you taking a little bit of a conservative view? Or -- you talked about pineapples and some cost pressures there and just in general, is it a conservative view? Or is 14.8% something that you think you could attain on a more sustainable basis longer term?

We feel comfortable with the guidance we're giving of 12% to 14%. As you may recall, we actually are increasing it by the 100 basis points. So we feel comfortable with 12% to 14% for the year.

Okay. And within the fresh and value add, you didn't talk a lot about fresh-cut. Could you talk a little bit about the trends there in the fourth quarter and how -- what you expect for 2026?

Fresh-cut is performing very well. Demand is strong. Our volumes are up and as well as pricing. So one of the things we expect next year or 2026 is continued strong demand for the fresh-cut line with good margins.

Okay. And is that -- yes. And is that demand geographically broad-based? Or is there any particular geography that's outperforming?

Well, the U.S. is our largest fresh-cut business, but the U.K. is also very strong. So that has been performing very well as well.

Okay. And so can you talk a little bit about your pineapple business? You talked about -- obviously, there's strong demand, but you have supply issues. Any update on maybe when supply expand a little bit. And also talk, if you could, about how you're looking with the Honeyglow and the Pink pineapple.

As far as the pineapple concerned, it is a fact that the market demand is higher than the supply as we speak right now. Our idea is that we are expanding our production in Costa Rica. We are -- as we speak, we are planting new acreage. So that would be mainly for North America and some to Europe. But we are as well expanding production into Brazil to support our European market, but that will take 2, 3 years from now to be able to supply this market.

So we, in general, are expanding somehow our volumes through new plantation. However, don't forget that there is a restriction on land availability as well as government approvals to -- it's becoming an issue, of course, in Costa Rica that you cannot plant everywhere and there are restrictions regarding environment and other reasons as well. So in our opinion that the market for pineapples, in particular to us is stable, continuing stable.

Now as far as pink pineapple, as we mentioned, I mean, on many occasions before, Mitch, that we did not increase our acreage. And so whatever we have right now is going -- at full production is going into the market. And now it is -- the pricing, of course, it's a different category from the main gold pineapple. So that is also helping us.

The Honeyglow is also a growing category. But you know that this is also restricted by weather and by the way that they manage the farms. We do have a good percentage of our volume now coming as Honeyglow into the market. And that, of course, achieves a premium pricing to the main variety. But all in all, I think that demand continues to outstrip supply as we speak, especially for Del Monte. Del Monte has a different quality, different pineapple from the rest of the industry.

Great. Okay. And then -- so on the banana side, you still got, obviously, the cost pressures with your -- and it remains competitive. I was curious in the last quarter, I didn't see any breakdown, but how did North America fare relative to Europe and the rest of the world, Middle East and Asia in bananas?

North America has been doing quite reasonably well. We have -- as you know, that we did not go for volume, we went for profitability. And we have said that before on many occasions that we are not going out for volume, but rather than for the bottom line. And if any business makes sense to us, of course, we do the sale. But -- and that's why you see our banana business maybe in volume has gone down, but we maintained our margins and our profitability.

So that's the kind of policy we are going to be following going forward, maintaining that we deliver the highest quality product to the market, but also at a price that can make sense to us and bring the margins that this business should generate.

And Mitch, what really impacted our margins in banana this year was Asia mostly. So unfortunately, that dragged the margin down.

Okay. Okay. And then a couple of other things. Monica, did you -- if I missed it, did you give the -- your capital spending estimates for 2026?

No. I think as we are going into the acquisition of Del Monte Food, we prefer that we can postpone this to the next quarter. So we will have better idea.

Okay. And outside of Del Monte, anything unusual this year in terms of your capital purchases or relatively normal?

No, relatively normal, Mitch. It will be more or less in the same range of the past few years.

Okay. And then when you look at the Del Monte, the potential asset purchase here, is there -- I know we're not giving accretion and guidance along those lines. But can you talk a little bit about perhaps sales growth of that business, how -- the parts that you're purchasing, do you have any sort of idea like and expected sales growth? And also, as you look at margins, would this be something accretive to your current gross margin? I mean, just give us some idea of the profitability of the business? Or anything you can help add there would be helpful.

I know everybody is anxious to hear this, Mitch, but we'd rather wait until Q1 to really give some good guidance on how we feel about this business. As you understand this, this was a process through a bankruptcy court, and it's been -- we'd rather wait until Q1.

Okay. Well, that's fair enough. Does Mohammad, you talked about this has been a long held conviction of yours to get the Del Monte brand back together again. So as much as it's part of that, is the long-held conviction, is it because you see the opportunity to really drive some extended profit growth out of that? Is there something -- or is it just combining it just helps -- I don't know, just helps the story better? Or is there really a profit accelerator here that is driving your conviction?

Well, my conviction always is to make money. My conviction is not -- I love the word unifying the brand together. Of course, that's a great achievement and the legacy to bring back Del Monte under one roof. But at the end of the day, our shareholders will be looking for what this means to them, and that's what exactly what we are looking for. But I can assure you that our objective is how can we accelerate margins and accelerate profitability on both sides of the aisle.

And I just want to highlight one thing here, which is a fact that Del Monte will become the only multinational in the food industry that has 2 divisions, fresh and food. There is no other company equal to Del Monte in the future. That, I think, by itself is something that will not be easily repeated anywhere in the world. Don't forget that Fresh Del Monte as we are, we are a multinational across the world with everything on the map from production to supply chain to logistics to -- you name it. And now with the addition of the food, then we will become not only a consumer goods company, but we will be the only unique company in the world that will have fresh and packaged or processed or can in all aspects. So that, in my opinion, is a unique advantage and a unique position that Del Monte will enjoy going forward in the future.

I will turn the call back over to Mr. Mohammad Abu-Ghazaleh for closing remarks.

I would like to thank everyone for joining this call, and I wish you a great day and look forward to speaking with you on our next call. Thank you, and have a good day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

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" Sturdivant & Co., Inc., Research Division

Good day, everyone, and welcome to Fresh Del Monte Produce's Third Quarter 2025 Earnings Conference Call. Today's conference call is being broadcast live over the Internet and is also being recorded for playback purposes. [Operator Instructions] For opening remarks and introductions, I would like to turn today's call over to the Vice President, Investor Relations with Fresh Del Monte Produce, Ms. Christine Cannella. Please go ahead, Ms. Cannella.

Thank you, Regina. Good day, everyone, and thank you for joining our third quarter 2025 conference call. Joining me in today's discussion are Mr. Mohammed Abu-Ghazaleh, Chairman and Chief Executive Officer; and Ms. Monica Vicente, Senior Vice President and Chief Financial Officer. I hope that you have had a chance to review the press release that was issued earlier via Business Wire. You may also visit the company's IR website at investorrelations.freshdelmonte.com to access today's earnings materials and to register for future distribution.

This conference call is being webcast live on our website and will be available for replay after this call. Please note that our press release and our call today include non-GAAP measures. Reconciliations of these non-GAAP financial measures are set forth in the press release and earnings presentation, which is available on our website. I would like to remind you that much of the information we will be speaking to today, including the answers we give in response to your questions, may include forward-looking statements within the safe harbor provisions of the federal securities laws.

In today's press release and in our SEC filings, we detail risks that may cause our future results to differ materially from these forward-looking statements. Our statements are as of today, October 29, 2025, and we have no obligation to update any forward-looking statements we may make. During the call, we will provide a business update along with an overview of our third quarter 2025 financial results, followed by a question-and-answer session. With that, I will turn today's call over to Mr. Mohammed Abu-Ghazaleh. Please go ahead.

Thank you, Christine, and thank you for joining us for our third quarter 2025 earnings call. We delivered another quarter of steady progress supported by strong execution across our portfolio. We saw continued gross margin expansion in our fresh and value-added product segment, and our pineapple program continues to perform well. Overall, our third quarter results affect our ongoing shift towards higher-margin value-added categories, a key driver of profitable growth.

We also took important steps this quarter to enhance long-term productivity and strengthen our financial performance. Most notably, we entered into an agreement to divest the operations of Mann Packing, a business that has not met our profitability expectations. We believe this divestiture will strengthen our overall margin profile and enhance capital efficiency going forward. While these decisions are never easy, they underscore our disciplined approach to managing performance and ensuring that every part of our business contributes meaningfully to our bottom line.

I would like to discuss a challenge facing the entire industry, the mounting pressure on global banana production, which I addressed last quarter and has since then only intensified. [Indiscernible] Tropical Race 4, which is known as TR4, was confirmed in Ecuador, one of the world's largest banana producers, making a serious escalation in Latin America after previous detections in Colombia, Peru and Venezuela. It is a highly contagious soil ball disease with no cure, and it's already destabilizing the region. In Peru, where TR4 was first detected in 2021, the impact is noticeable in the Pura region, the country's leading producer of organic bananas. A recent study found that 45% of farms are already infected and about 10% have been completely eradicated. Small growers are under mounting pressure as black sigatoka spreads and TR4 reaches new countries. With already thin margins across the sector, rising disease control costs are making survival increasingly difficult.

At Fresh Del Monte, we have been preparing for these challenges for years. We are advancing work on TR4-resistant banana varieties, an essential step toward long-term resilience, but solutions of that scale take time. In the meantime, growers, large and small, are taking every possible measure to control these diseases. Each year, these efforts are becoming more demanding as the situation further deteriorates, placing new financial strains on growers across the industry. We are seeing the impact clearly in Costa Rica.

As of August 25, production in the industry has declined 22% year-over-year, which is roughly 18 million boxes lost with most of that loss stemming directly from Black Sigatoka. For a country long recognized for its agricultural efficiency, that's a significant and concerning decline, one that inevitably drives costs higher across the industry. Demand for bananas remains strong. What's shifting is the balance between supply and demand and the underlying economics of the category. Understanding that shift is essential for everyone involved. Sustaining this category over the long term would require closer alignment across the value chain, ensuring that pressures in the fields are understood and shared throughout the supply chain. The farmer can no longer absorb these rising costs. It is easy to take the bananas for granted. Simple, familiar, always there. But behind that simplicity lies one of agriculture's most coordinated and collaborative supply chains. Protecting it is our shared responsibility. And if we don't act collectively to support growers and stabilize this supply chain, we risk seeing this fruit and the livelihoods behind it disappear before our eyes. That reality weighs heavily on me and drives much of our focus today. With that, I will turn it over to Monica Vicente, our CFO, to discuss our financial results.

Thank you, Mr. Abu-Ghazaleh, and good morning to everyone, and thank you for joining us today. Before reviewing our quarterly financials, I'd like to highlight several strategic actions we took during the quarter to strengthen our portfolio and drive long-term value. We took important decisions to streamline operations and reallocate capital towards higher-performing areas, which resulted in an impairment charge totaling $56 million. $18 million relates to the planned divestiture of Mann Packing, which Mr. Abu-Ghazaleh already mentioned. This supports our strategy to simplify operations and prioritize higher growth, higher-margin categories.

We acquired Mann Packing in 2018 and have now entered into an agreement to sell the business, including substantially all operating assets. The buyer, Church Brothers Farms, will acquire machinery and equipment and customer list for $19 million plus the value of inventory at closing. The transaction excludes certain real property, including our Gonzales, California facility, which we've agreed to lease for under a 5-year agreement with a renewal and purchase options. This divestiture is expected to close during the fourth quarter of 2025, subject to customary closing conditions. Mann Packing contributed $174 million in net sales during the first 9 months, but was a headwind to our strategic margin targets for the fresh and value-added products segment. We had previously pursued streamlining efforts. However, after further evaluation, we determined that a full divestiture better aligns with our long-term strategy.

During the quarter, we also recorded $37 million in impairment and other charges related to underperforming banana farms in the Philippines, which served our Asia and Middle East markets. Despite efforts to improve yields and manage costs, the farms continue to underperform, impacting profitability. After reassessing performance, we made the decision to abandon operations at these farms. This move enables us to reallocate resources to more productive supply channels.

Continuing with our broader efficiency efforts, we sold a break bulk shipping vessel from our fleet during the quarter and recently completed the sale of a second vessel. This reflects our continued shift away from legacy breakbulk vessels, and we remain committed to our vertically integrated logistics model and operate 6 modern vessels supporting our global supply chain. Let's now review our financial results for the third quarter of 2025, including adjusted results, which exclude the impact of the Mann Packing divestiture.

As Christine mentioned, reconciliations are available in today's press release and earnings presentation in our website. Net sales were $1.02billion-- $1.022 billion. The increase reflects higher net sales in our Banana and Other Product Services segments, primarily driven by higher per unit selling prices in our Banana segment. Contributing factors included the impact of tariff-related price adjustments in North America and the favorable impact of fluctuations in exchange rates related to the euro. The increase was partially offset by lower sales volume in our fresh-cut vegetable product line due to operational reductions taken during the fourth quarter of 2024. Adjusted net sales were $960 million. Gross profit was $81 million. The decrease was primarily driven by higher per unit production and procurement costs in the banana segment, along with increased distribution costs.

Gross margin decreased to 7.9%. Adjusted gross profit was $88 million and adjusted gross margin decreased to 9.2% -- despite margin compression, this quarter reflects the resilience of our core business strength and early progress from our shift toward higher-margin value-added categories. We expect margin recovery and improved efficiency ahead, supported by the Mann Packing divestiture and continued cost discipline. We reported an operating loss of $22 million, which reflects higher asset impairment and exit charges related to the underperforming banana farms in the Philippines and the impairment charges associated with divestiture of Mann Packing, along with lower gross profit in the current period.

On an adjusted basis, operating income was $40 million. Net loss attributable to Fresh Del Monte was $29 million, while on an adjusted basis, net income attributed to Fresh Del Monte was $33 million. Our diluted earnings per share was a loss of $0.61 and adjusted diluted earnings per share was income of $0.69. Adjusted EBITDA was $58 million. We expect adjusted EBITDA margin to improve due to continued gross margin momentum in our fresh and value-added products segment and disciplined cost management.

Let's take a closer look at the financial performance of our business segments, starting with our fresh and value-added products segment. Net sales were $611 million. The decrease was primarily due to lower per unit selling prices in our avocado product line, driven by increased industry supply and lower net sales in our fresh-cut vegetable product line following the operational reductions implemented during the fourth quarter of 2024 previously mentioned. Offsetting factors included higher sales volume and per unit selling prices in our fresh-cut fruit product line and increased per unit selling prices in our pineapple product line, along with tariff-related price adjustments in North America. Adjusted net sales were $548 million. Gross profit was $68 million. The increase was driven by higher per unit selling prices in the pineapple and fresh-cut fruit product lines. Gross margin increased to 11.2% and adjusted gross profit was $76 million with adjusted gross margin increased to 13.9%. We aim to sustain gross margins in the low to mid-teens for this segment, driven by continued improvements in our product mix within this segment.

Now moving to the banana reporting segment. Net sales were $358 million. The increase was driven by higher per unit selling prices across all regions, including the favorable impact of fluctuations in exchange rates, combined with the tariff-related price adjustments in North America and higher sales volume in the Middle East. These gains were partially offset by lower sales volume in Asia and North America, reflecting softness in market demand during the quarter. Gross profit was $5 million, and the decrease was driven by higher per unit production and procurement costs due to adverse weather conditions in our growing regions in the first half of this year, increased distribution costs, along with an allowance recorded on our receivable from an independent grower in Asia. Gross margin decreased to 1.3%. Adjusted gross profit was $4 million, and adjusted gross margin decreased to 1.2%.

Lastly, our Other Products and Services segment. Net sales were $53 million. The increase was a result of higher net sales in our third-party freight services business, partially offset by lower per unit selling prices in our poultry and meats business. Gross profit was $8 million. The decrease was due to lower net sales and higher production costs in our poultry and meats business. Gross margin decreased to 14.8%.

Now moving to selected financial results for the third quarter of 2025. Our income tax provision was $4 million. The decrease was primarily driven by lower earnings in certain higher tax jurisdictions. Net cash provided by operating activities was $234 million for the first 9 months. The increase was primarily due to working capital fluctuations, mainly lower accounts receivable driven by timing of collections and reduced finished goods inventory. At the end of the third quarter of 2025, our long-term debt stood at $173 million. Our adjusted leverage ratio remains well below 1x EBITDA. Capital expenditures for the first 9 months of 2025 totaled $36 million. Investments during the quarter focused on enhancing our banana and pineapple operations in Central America, upgrading operations and production facilities in North America, along with improving our pineapple operation in Kenya.

As announced in our press release, we declared a quarterly cash dividend of $0.30 per share payable on December 5, 2025, to shareholders of record as of November 12, 2025. On an annualized basis, this equates to $1.20 per share, representing a dividend yield of 3.4% based on our current share price. During the third quarter, we repurchased just over 200,000 shares of our common stock for $7 million at an average price of $35.55 per share. We still have $135 million available under our share repurchase program. Taken together, these actions reflect our commitment to delivering long-term value, supported by a strong sustainable dividend and a balanced capital allocation strategy that includes opportunistic share repurchases. With that, let's turn to the outlook for the remainder of the year and the strategic priorities.

We continue to expect net sales growth of approximately 2% year-over-year, consistent with our prior guidance. As far as gross margins by business segment, in our fresh and value-added products segment, excluding the impact of the divestiture of Mann Packing, gross margin is expected to be in the 11% to 13% range, primarily driven by strong performance in our pineapple product line and favorable product mix. While the divestiture of Mann Packing is scheduled to close on December 15, we expect to begin realizing the benefits of the streamlined portfolio in the fourth quarter of 2025 with a more pronounced impact on profitability and margin performance in 2026.

In our banana segment, gross margin is expected to compress below the historical 5% to 7% range, approaching 4% due to lower industry-wide supply and cost pressures from disease treatments as well as weather-related disruptions, which continue to cause shipping delays and port congestions. Both factors have significantly increased our costs. It's important to remember that with the banana segment, our focus remains on margin discipline over volume, and we continue to prioritize product quality and reliability for our customers even in the face of these extraordinary challenges. Bananas remain a foundational part of our product portfolio, essential for meeting customer expectations and supporting our broader commercial strategy, even if it's not a driver of growth.

For our Products and Services segment, gross margin is expected to be in the range of 10% to 12%, slightly below prior expectations. This reflects lower selling prices in our poultry and meats business, which are pressuring margins. Selling, general and administrative expenses are expected to be in the range of $205 million to $207 million.

Regarding CapEx, we now expect our full year spend to be in the range of $60 million to $70 million, down from $70 million to $80 million previously communicated. This reflects updated project time lines. Net cash provided by operating activities is expected to exceed the previously guided range of $180 million to $190 million, coming closer to $190 million to $200 million.

In closing, we continue to actively manage external pressures, including elevated operating costs and macroeconomic uncertainty. The strategic actions we've taken this year, streamlining our portfolio, reallocating capital and enhancing supply chain resilience position us to navigate the rest of the year with agility and focus. These actions reflect our commitment to disciplined execution and long-term value creation. This concludes our financial review. We can now turn the call over to Q&A. Regina?

[Operator Instructions] Our first question will come from the line of Mitch Pinheiro with Sturdivant & Company.

So I want to start out with a look at the fresh and value-added segment. So the adjusted gross margin was kind of eye-opening at 13.9%. And I know you're sort of guiding 11% to 13% as sort of your gross margin expectation. But is -- I guess is 13% the new normal for this business?

I think we're getting there, Mitch. I think we'll be getting very close to that margin consistently. So yes, you can see that the adjusted gross margin this quarter was very -- like you said, it's an eye-opening now that we've excluded mann. So we do expect to be very close to the 13%. We're still being cautious. We're doing the 11% to 13%, but we feel confident about this segment.

And so I haven't seen the Q yet, but I'm curious Pineapples, obviously, the supply has been down right now, but you're getting some pricing. Are your costs up in pineapples as well? Like you talked about the bananas and more cost for -- on the -- at the farm level. But is there -- and actually at the port shipping, but are pineapple margins still going to be your strongest of your -- in that segment?

Yes, that's a fact. And when it comes to cost, cost, the pineapple, thanks God, doesn't have the same diseases or same kind of plagues that is happening to the bananas. So we don't see increases in terms of applications of certain chemicals to our farms in the pineapple business. So pineapple does not definitely, there is inflation adjusted cost increases, which is normal on the labor side or other services. But all in all, it's a normal kind of environment. So we don't expect significant cost increases on pineapples. And you are right, I mean, the pineapple category is -- volumes are more or less static. And the demand is, in general, outstripping supply. So as we speak today, we don't have enough to allocate to every customer that we have. So it's more selective today than being in the past.

Yes, I've noticed you were obviously the leader in sort of innovation in pineapples and the marketing around it, but I'm also seeing some of your competitors start to -- like, I guess, do start to try to emulate some new product varieties. And I was wondering if it's essentially raising the value of the fruit with continued innovation and improved quality. Is that -- do you get the sense consumers notice that?

Well, yes, of course. I mean we yes, I mean the better -- the better fruit that you deliver to the market, the more ripe, the more higher sugar content, better sweetness or taste definitely have an influence on the consumption and the buyer kind of appetite to buy it. I mean there is no question that -- I think as Del Monte, we have been pioneer at the forefront of innovation and development. And I wish everybody else good luck with whatever they are doing. But I mean, Del Monte has a history of being the forefront into this. And I think that will remain in place.

And you still see from a supply point of view, when -- what's your best estimate for when you start to see demand supply recover?

I don't think that supply is going to -- as we go forward years ahead, there is not too much land left. I mean, in Costa Rica, we cannot double production, for instance. It's impossible or let's say, 20% or 30% more than what is happening right now. And Costa Rica is the major producing country in all Latin America. So -- and it's not easy to grow pineapples anywhere you want. Land is restricted. Environment as well concerns are part of this restrictions on additional acreage or additional production. So I believe consumption on a global level is going to increase. And we see that actually not only in North America, but we see that in Europe. We see that in the Middle East. We see that in Asia. It's a growing, let's say, commodity. It's becoming more fashionable for people to eat more pineapples and especially because of the good quality of these pineapples today.

So I can tell you, the Middle East, we are almost 100% -- almost 100% in the market. I mean -- and because of our proximity from Kenya into these markets, -- our Brazilian plantations are in progress right now. And what, 3 years from now, we will start having production out of Brazil, which will be the only company anywhere in the world that has production of ND2 gold pineapple in Brazil. So that will kick in. It may take some time, but I think that will be very significant for us going forward in the future. And we are looking at other areas of expanding pineapple as well as we speak. So I mean, in terms of our positioning in the pineapple, I'm very confident and comfortable actually with our pineapple business going forward in the future...

Okay. And then just two more questions on the fresh and value-added. Avocados, I know supply is strong and pricing has been down. Do you see that kind of reversing here in the next 6 months as you see pricing firming, I should say?

It could happen because actually, with Peru increasing volumes, with Colombia increasing volumes and other countries, Chile and California and the Mexicans did not have that opportunity. I mean if you look at the prices year-over-year, I think that period, we were talking about $70, $60, $70, $80 a box of avocado. -- now it's selling for almost half of that. So you can see the impact on the revenue itself. I mean, as a seller ourselves, of course, that would impact our revenue, selling the same volume for 80 or 70 or 60 rather than selling at 30 or 35, that makes a huge difference. But there could be maybe a pickup during the next 2-3 months because Mexico will be more or less exclusive in one way in terms of supply to North America. But I think it will not be a long-term kind of escalation in prices. I think that prices will remain more or less in the region that we are seeing right now between maybe $30 and $50, but not more.

And remember, Mitch, we buy the product from the grower. So we have the margin based on what we buy and sell. So even though the sale price is much lower, our cost is lower as well. So our margins have stayed pretty more or less even from last year. So unfortunately, it impacts our sales, but our margin is not impacted as much.

Yes. And then -- so -- but with pricing coming down, shouldn't that -- would you expect to see stronger volumes consumption?

Well, I don't see the prices of the retail to be really reflecting that adjusted.

Yes, I'm a big buyer of avocados, and I'm still paying the same...

Okay. And just switching gears to -- I did want to ask about how your fresh-cut fruit business is doing. I didn't see any comments around that.

They're doing -- yes, Freshcut is doing excellent as well. Like you know, we view that together with the pineapple as one of the primary products, and it performed very well during the quarter, and we expect to continue with a strong performance.

I don't remember if I mentioned earlier last year that we started fresh guacamole offering fresh guacamole in the market. And we started this new category, which is 100% fresh guacamole. And it was like -- we started from 0. And today, I think we will end at the end of this year with about $8 million in revenue on that category alone. So that tells you where our innovation is and where we are going. with reasonably good margins.

Yes. I just want to move on to the banana business. So pretty -- you laid out the issues pretty well from a category. What I was curious about was why banana volume or consumption in North America. I'm not sure what it is in Europe, but why consumption is down. I've asked before, we really don't know, I guess, but I was wondering if you have any recent insights as to banana consumption.

Well, it's seasonal, I would believe, Mitch, during the summer with all the summer fruits availability and people usually during the summer would go for more, let's say, like watermelon and melons and grapes and -- so I think it's not a trend. I think it's a hiccup. -- bananas more or less consumption-wise will be stable. I don't believe that we will see a huge drop into banana consumption in terms of consumer appetite. But my -- the problem is that the costs are going up and the prices are not moving in the same direction. So -- and that is the dilemma here. I mean -- and the diseases are not going away. The disease is continuing and spreading and intensifying as a matter of fact.

So if you remember a few years back, I said that we will see bananas at $20 a box. We are almost there. I mean, today, if you look at Ecuador, just the fruit alone is around $11 to $12 per box, just the fruit aside from all the other costs of packaging and services. So if you add up everything, you're talking about could be $16, $50, $60, $17 and even more per box. So we are talking about, I mean, substantial increases. And the most important thing, which people do not really focus on is the Sigatoka spread in Central America as well as, as I mentioned earlier, the TR for disease, which it's not if, it's when. It's just a matter of time when it's going to be spreading.

And we saw that in the Philippines and the write-off that we took in the Philippines and we saw yesterday, it was because of that. I mean we became -- I mean, the disease has -- no matter what you do, it's like a losing battle against that disease. I mean you can replant and then 3 years later, 4 years later, you lose 3 again. So this is really -- people don't understand and realize how serious this issue is. And this is going to happen, be it tomorrow or after a year or 2 or 3 is going to happen. It's going to come. And I can assure you that, that disease does not stop spreads. It's just a matter of time.

And Mitch, you see our margin for the banana suffered this quarter, and we're projecting closer to 4% for the year. The impact of the Sigatoka is very significant, not only because you have lower volume coming out of the ground, but the cost to protect the farms from Sigatoka is very high. So it's very obvious based on our results, the impact of these diseases.

So one thing -- bananas are obviously, I guess, the largest category of fruit, I guess, in the United States and maybe apples -- but certainly hugely important. And with all these added costs and the margins have always been kind of thin, you'd expect pricing to rise, but there's always been some element of irrationality among all the major players and in pricing, maybe you excluded, but my question is, I noticed that the 4 largest banana producers formed a new organization, VANA, you, Dole, Fs and the other one, whatever it a -- and then -- does that -- is this level of cooperation maybe a sign down the road that there's going to be a little more rationality to the quarter in banana pricing relative to the increase in costs and lower supply?

I don't think that association or that kind of gathering by the 4 banana companies was mainly to streamline the business better and nothing to do with actually influencing volumes or pricing in the market. It's rather than to understand the business better and trying to find solutions in terms of hopefully, agricultural practices and other logistical issues. But the point here, Mitch, people don't understand and don't get it that all of a sudden, one day, everybody will wake up and all of a sudden, there is not enough bananas to -- and we see that in other countries in the world. I mean, I see that in the Philippines. I saw that in Africa. All of a sudden, over years, the banana production is totally lost and/or 50%, 60% down on the previous -- I mean, on the normal trend. And this is going to happen.

I mean, we can see that actually as we speak right now in Ecuador. Ecuador is the largest producer of bananas in the world. And right now, you can see that the production is not picking up as it used to be. And that's an indication of what's going on in the industry. And people don't understand that. I've been all my life in this business. And I know and I can anticipate things. And I believe that there will come a time that there will be a huge drop in production. And as you can see, as a company ourselves, we are very careful. We are very stringent, and we are very -- we calculate our steps. I mean we're not here to lose money. I mean we are here to make money to our shareholders. And we will do whatever is necessary to streamline our business in the best way we can, be it on bananas or any other item.

And I think for bananas, in particular, there will come a time that people realize that there is not enough bananas in the market and the prices will shoot up in a way that will be a shock to the market. And that's the reality that if people really take this into consideration, it's better to really improve conditions for the growing side of bananas and supply side in order to maintain stability and continuity. But it's a short term, in my opinion, short-term vision and short-term kind of strategy that is happening right now.

It's just like Monica mentioned a few minutes ago, I mean, the chemical that we apply to Sigatoka, which is the black -- it turns the leaves into totally black and then we lose the bunches on the 3 the price of this product, the chemical, which is the only one in the world, you don't have a choice. You only have one product that you need to use. And that product has increased over the last 2 years by over 50%, 40%, 50% and still going up and you have no choice, either you spray and the problem that the disease is getting immunity. I mean, that disease, is becoming adapting to that chemical. So you need to apply more to try to prevent it or control it. It's a vicious circle. If you don't apply or if you don't apply enough, you will lose more fruit. But if you're going to apply more cycles into the field, that means more cost to you. So it's really -- I mean, if you look at our cost, it's about $1.30, $1.40 today per box just for this chemical alone applications. So I think that's the reality of the situation.

So one of the questions is about the Black Sigatoka. -- is one other mitigation effort can be fewer trees, more -- less canopy, more sunlight.

That is exactly what I said earlier, 18 million boxes down in Costa Rica production on a national level. That's mainly because of Sigatoka. It's not because of anything else, mainly because of Sicatoga. So if this happens in Ecuador, if this happens in Guatemala, if this happens in Panama, it's the same story.

Okay. And then just one other question in tariffs. across your entire portfolio, how much did tariffs add to the top line?

We haven't given that number, Mitch, but we were able to pass on the tariffs in North America, but we haven't given the number.

It's really minimal. It's not much. It's minimal.

[Operator Instructions] And that will conclude our question-and-answer session. I will now turn the call back over to Mr. Abu Ghazaleh for closing remarks.

Thank you, everyone. I appreciate joining us today and hope to talk to you in the next call. Have a good day.

That will conclude today's call. Thank you all for joining. You may now disconnect.

Good day, everyone, and welcome to Fresh Del Monte Produce's Second Quarter 2025 Earnings Conference Call. Today's conference call is being broadcast live over the Internet and is also being recorded for playback purposes. [Operator Instructions] For opening remarks and introductions, I would like to turn today's call over to the Vice President, Investor Relations with Fresh Del Monte Produce's, Ms. Christine Cannella. Please go ahead, Ms. Cannella.

Thank you, Denveray. Good day, everyone, and thank you for joining our second quarter 2025 conference call.

Joining me in today's discussion are Mr. Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer; and Ms. Monica Vicente, Senior Vice President and Chief Financial Officer.

I hope that you had a chance to review the press release that was issued earlier via Business Wire. You may also visit the company's IR website at investorrelations.freshdelmonte.com to access today's earnings material and to register for future distribution.

This conference call is being webcast live on our website and will be available for replay after this call.

Please note that our press release and our call today include non-GAAP measures. Reconciliations of these non-GAAP financial measures are set forth in the press release and earnings presentation, which is available on our website.

I would like to remind you that much of the information we will be speaking to today, including the answers we give in response to your questions, may include forward-looking statements within the safe harbor provisions of the federal securities laws. In today's press release and in our SEC filings, we detail risks that may cause our future results to differ materially from these forward-looking statements. Our statements are as of today, July 30, and we have no obligation to update any forward-looking statement we may make.

During the call, we will provide a business update, along with an overview of our second quarter 2025 financial results, followed by a question-and-answer session.

With that, I will turn today's call over to Mr. Mohammad Abu-Ghazaleh. Please go ahead.

Thank you, Christine, and thank you for joining us for our second quarter 2025 earnings call. The second quarter of 2025 delivered another period of strong performance for Fresh Del Monte, continuing the momentum we have built through consistent execution and strategic discipline. This quarter, historically our strongest of the year, saw growth across key financial metrics.

Net sales increased by 4%. Gross profit rose 6% compared with the prior year period, and gross margin expanded to 10.2% from 9.9% compared to the same period last year. This quarter's positive results reflect the power of consistency and continuous improvement across our Fresh-Cut business and ongoing demand for our Pineapple portfolio. Much of this growth reflects a long-term shift in the Pineapple category, one, we helped lead. In the 1970s, Americans consumed less than a pound of pineapple per day per person. Today, that number is nearly 8x higher according to the USDA.

This transformation began with our 1996 launch of Del Monte Gold, the first widely available sweet pineapple and continuous through the strength of our proprietary offerings and value-added formats. We know that consumers are engaging more with pineapples. According to [indiscernible] panel, a leading provider of free in-house for purchase insights, consumer spend on tropical fruit has risen 58% since 2017, outpacing overall produce growth and signaling the rising relevance of the category itself.

As a pioneer in this space, we are well positioned to lead. Demand for our Pineapple portfolio remains strong and continues to outpace supply, driven by trusted brands like Honeyglow and Pinkglow, which is the result of the case of agronomic leadership and targeted investments. We are managing global supply carefully, strengthening continuity and taking steps to ensure consistent availability for our customers. We also launched Pinkglow in the United Arab Emirates during the quarter, marking our first sustained market entry for a variety in the Middle East. While still early in scale, it reflects a strategic step in expanding our high-value portfolio into new international markets where brand distinction and the potential alike.

We also know that when it comes to pineapples, convenience meters, demand accelerates when the product is fresh cut, prepared and ready to enjoy. As more consumers around the world prioritized health, flavor and ease our ability to meet that demand with the right product mix and the operational agility to deliver it is driving meaningful growth across our Fresh-Cut business. We are also continuing to advance our efforts in high-margin, value-added business ventures, particularly those focused on residues and specialty ingredients. These projects are still in their early stages, but we believe they represent real long-term opportunities.

Like many in the industry, we are managing disruptions at the Port of Caldera in Costa Rica. Unusually strong ocean swirls, the worst that we have seen in the case have severely limited vessel access. With minimal structural protection, the port has become a choke point, leading to wait times of 3 to 5 days and increased congestion. The result is higher cost and broader logistical impact across the industry. While the situation remains difficult, our teams are responding with urgency, adjusting schedules, reallocating shipments and doing everything possible to maintain continuity for our customers.

Before I go, I believe it's important to discuss an industry-wide situation regarding bananas, one that I have been predicting and warning about for years. There is a global shortage in banana production. The causes are clear, shifting climate patterns, particularly warmer temperatures combined with humidity are accelerating the spread of disease in key growing regions. Primarily black [indiscernible] on top of that, the continued spread of serial non-estropical race 4 is adding further pressure. These diseases are having a direct impact on supply. Lekicatogeis affecting crops across Central America, while other countries are facing the compounded impact of both diseases.

As we have shared previously, our R&D teams have been working to address the global threat posed [indiscernible], and we are pleased to report that field testing of resistant gene additive banana is expected to begin in the coming months, a meaningful step toward long-term category resilience. Meanwhile, global demand for bananas remains strong as they continue to be one of the most affordable and accessible fruits in the grocery aisle. We are already seeing a clear imbalance between supply and demand, and we anticipate this would remain a key industry dynamic in the quarters ahead.

With that, I will turn it over to Monica to discuss our second quarter 2025 results in detail. Monica?

Thank you, Mr. Abu-Ghazaleh, and good morning, everyone, and thank you for joining us on today's call. I'll begin with our second quarter financial results, followed by our outlook for the rest of the year. As Christine mentioned, our press release and our call today include non-GAAP measures. Reconciliations of these non-GAAP financial measures are set forth in the press release and earnings presentation, which is available on our website.

The second quarter is historically our strongest period, having said that, this quarter reflects our continued efforts to expand our margins by focusing on improving our product mix. Now let's go through the financial results. Net sales were $1.183 billion compared with $1.14 billion in the prior year, an increase of 4%. The increase was driven by higher net sales in our fresh and value-added products and banana segments due to higher per unit selling prices and favorable impact of fluctuations in exchange rates primarily related to euro, Japanese yen, British pound.

The increase also reflects tariff-related price adjustments in North America. Gross profit for the second quarter was $120 million compared with $113 million in the prior year. The increase was driven by higher net sales in our fresh and value-added products segment, partially offset by higher per unit production and procurement costs as well as increased distribution costs, including tariff charges in North America. Gross margin was 10.2% compared with 9.9% in the prior year. This also includes a sequential increase from 8.4% in the first quarter.

Operating income for the second quarter was $68 million, roughly in line with the prior year. The slight increase was primarily driven by higher gross profit, partially offset by lower gain on disposal of property, plant and equipment in the current year. Adjusted operating income was $69 million compared with $65 million last year. Other income for the second quarter was a gain of $6 million compared with a gain of $2 million in the prior year. The change was due to equity earnings from unconsolidated companies within the food and nutrition sector.

Net income attributable to Fresh Del Monte for the second quarter was $57 million compared with $54 million in the prior year, and adjusted FTP net income was $59 million compared with $51 million last year. Our diluted earnings per share for the second quarter was $1.18 compared with $1.12 in the prior year. And adjusted diluted earnings per share was $1.23 compared with $1.06 in the prior year.

Adjusted EBITDA for the second quarter was $95 million, up from $89 million in the prior year. Both quarters reflected an 8% margin as a percentage of net sales.

Let's now take a closer look at the financial performance for the second quarter across our business segments beginning with our fresh and value-added product segment. Net sales for the second quarter were $723 million compared with $694 million last year, an increase of 4%. The increase was primarily driven by higher per unit selling prices in our pineapple product line as well as higher sales volume and per unit selling prices in our fresh-cut fruit product line, both supported by continued strong market demand. Additional contributions came from the favorable impact of fluctuations in exchange rates as well as tariff-related price adjustments in North America.

The gains were partially offset by lower net sales in our fresh-cut vegetable and vegetable product lines, reflecting strategic operational reductions implemented in the fourth quarter of 2024, which included the sale of certain assets of Fresh Leaf Farms.

Gross profit was $85 million compared with $78 million in the prior year. The increase was driven by higher net sales, partially offset by higher per unit production and procurement costs as well as increased distribution costs, including the impact of tariffs in North America. Gross margin was 11.7% in the second quarter compared with 11.2% in the prior year. This also includes a sequential improvement from 10.1% in the first quarter of this year.

We are continuing to build on this momentum as we work toward our goal of sustaining double-digit gross margins in the long teens for this segment, supported by ongoing improvements in product mix, including growth in our premium pineapple varieties such as Honeyglow and Jet Fresh.

Moving on to Banana segment. Net sales for the second quarter were $410 million compared with $394 million in the prior year, an increase of 4%. The increase was primarily driven by higher per unit selling prices across each of our regions, combined with favorable impact of fluctuations in exchange rates, along with tariff-related price adjustments in North America. We also saw higher sales volume in the Middle East as last year was impacted by shipment disruptions related to the Red Sea conflict. The increase was partially offset by lower sales volume in Asia where an oversupply of local seasonal fruit weakened demand and persistent crop disease reduced available supply.

In North America, sales volume was also impacted by crop disease, specifically the continued spread of Black Sigatoka, which has intensified by adverse weather conditions in our growing regions. Gross profit was $30 million, in line with the prior year. The benefit of higher net sales was mostly offset by higher per unit production and procurement costs resulting from the adverse weather conditions already mentioned, along with higher distribution costs, including the impact of tariff-related charges in North America and ongoing industry-wide port congestion and logistical disruptions across our Central American ports. Gross margin was 7.3% in the second quarter of 2025 compared with 7.6% in the prior year.

Lastly, our Other Products and Services segment. Net sales for the second quarter were $50 million compared with $51 million in the prior year. The slight decrease was primarily due to lower per unit selling prices in our poultry and meats business. Gross profit was $5 million compared with $6 million in the prior year as a result of the lower net sales. Gross margin was 10.4% in the second quarter compared with 10.7% last year.

Now moving to selected financial results. Our income tax provision for the second quarter was $14 million compared with $12 million in the prior year. The increase was primarily due to increased earnings in certain higher tax jurisdictions. Our effective tax rate for the second quarter was 20%. Net cash provided by operating activities for the 6 months was $159 million compared with $144 million in the prior year. The increase was primarily due to higher net income and working capital fluctuations, mainly driven by higher levels of accounts payable and accrued expenses, partially offset by higher levels of inventory when compared to the prior year.

We ended the second quarter with $201 million of long-term debt, an 84 or 29% reduction compared with the prior year and an 18% reduction compared with fiscal year-end 2024. Our adjusted leverage ratio remains at less than 1x EBITDA. Our CapEx investment for the first 6 months was $22 million compared with $21 million in the prior year.

As announced in our press release, we declared a quarterly cash dividend of $0.30 per share payable on September 5, 2025, to shareholders of record on August 13, 2025. On an annualized basis, this equates to $1.20 per share, representing a dividend yield of 3.3% based on our current share price.

With that, let's turn to our full year outlook and strategic priorities. As we look ahead, we continue to expect full year 2025 to be broadly in line with the outlook we shared during our first quarter call. Our outlook reflects our expectation for stable demand across our core products, ongoing operational efficiencies and disciplined execution on our strategic initiatives. As part of that execution, we're currently transitioning from legacy break box shipping vessels to container vessels in the Asia Pacific region and we plan to sell two older vessels later this year. This shift enhances operational efficiency and better aligns with our evolving logistic needs.

As I mentioned earlier, historically, the second quarter has been one of our strongest and this year was no exception. We are confident about our full year trajectory while we remain mindful of evolving external factors beyond our control. We believe our underlying business fundamentals are strong, and we are confident in our ability to deliver on our full year 2025 objectives. We reiterate our expectation for the full year as follows.

We expect to see net sales growth 2% year-over-year. And as far as gross margins by business segment, in our fresh and value-added products segment, gross margin is expected to be in the range of 10% to 11%. In our Banana segment, gross margin is expected to be in the lower end of historical range of 5% to 7%. For our Other Products and Services segment, gross margin is expected to be in the range of 12% to 14%.

Our selling, general and administrative expense is expected to be in the range of $205 million to $210 million. As it relates to CapEx, we now expect our full year spend to be in the range of $70 million to $80 million, down from $80 million to $90 million previously communicated. This revision reflects updated project execution time lines. We remain committed to funding initiatives that drive long-term value. We expect noncash provided by operating activities to be in the range of $180 million to $190 million.

In closing, the second quarter delivered solid net sales and net income, consistent with our expectations and relative -- and reflective of the seasonal strength we typically see this time of year. As we enter the second half, we're mindful of typical third quarter dynamics including increased availability of seasonal fruit and softer demand during the summer months. We remain focused on executing our strategy, delivering value and positioning Fresh Del Monte for long-term success.

This concludes our financial review. We can now turn the call over to Q&A. Desaray?

[Operator Instructions] And we have a question comes from the line of Mitch Pinheiro with Sturdivant & Company.

So I did -- I want to start -- I have a bunch of questions. First on the pineapple business. So pineapple supply has struggled a little bit here, I guess, weather-related, but I was wondering, Mohammad, if you could give us an update on where you think and how -- we saw a lot of new pineapple growth, and I was wondering how you expect that to play out over the next 6 months and then what supply looks like for your pineapples into 2026? So are we going to see an increase that fast? Or are we not there yet in the cycle?

We expect that continuing to the end of this year and going into next year, there will be -- in our opinion, there will be a shortage of supply, more or less like this year or a little bit even more. So we expect from our part -- on our side, I can't speak for the industry, but as Fresh Del Monte, we see a very strong pineapple market going forward, especially with our premium varieties that is better in the market. And our expertise and our seeds are definitely better than anything in the market. So I believe that in our case, I don't see any change to what is going on right now. The dynamics in the market through '26 and in addition to that, and I would say, about a couple of years, 2, 3 years, we will be starting our production in Brazil, which I think we haven't announced that, but that will be another new area of production sourcing. And that would be mainly for the Brazilian market in particular.

So once you get through 2026, I guess, like what type of growth rate would you expect to see in your own businesses supply? Like are we talking new planning and things like that would be mid-single digit? I mean, are you -- is it stronger...

I would say in Costa Rica, we will have expansion. As we see, we are expanding our production. Areas that have not been planted before already under plantation. And as I said, we are expanding also in other parts of the world and in Africa and Brazil as well as in the Philippines. So we are having, I mean, not concentrated in one location, but really across the world, but we will be having over the next 2 to 3 years. I cannot give you figures exactly, but I'm telling you that we are already expanding our production capacity, and we expect there will be. And I would say it will not be like multi-million additional, but there will be a meaningful increase in our production in the next 2 to 3 years.

And Mitch, on the Costa Rica expansion, specifically, a little bit higher than the mid-single digits, and you know this is a long-term crop. So definitely '27 from today compared to '27 little bit higher than the mid-single digits, just Costa Rica.

Okay. And then regarding Pinkglow, I'm seeing more distribution. Where do you guys stand in terms of like let's just talk about the U.S. market or North America, your ACV, does -- where is it today? How supply-constrained is it? And what do you see the future as far as distribution growth for the Pinkglow in the next, say, year, 2 years?

Actually, we were constrained by limited supply going to the market because until recently, the authorities in Costa Rica were not allowing us to plant more big pineapple because of the GMO issue and the contamination risk. We have been granted recently to increase our acreage, and that's what we are going to be doing very soon. So supply is -- hopefully, it will take about 18 months for supplies to start coming in, additional supplies, I mean. So I will see -- I would not say in -- could be at the end of '26, early '27, we will see more suppliers coming into the market, where the market is really absorption or the reception is there. It is that we don't have enough supply along with the other countries that we are not supplying yet, I mean, outside North America, which is, as we said, we've just been sending some Pinkglow Pineapple by air to the Emirates, just to give you -- I mean it's being sold online as well.

I mean it's not in the supermarkets. And just to give you an idea of -- it's about, I would say, about $30, $33 a piece that is being sold now online in the Emirates. And everything that we send is prebooked and presold. So we are now trying to get into Saudi Arabia as well and a couple of other countries in the region. But as I said, also supply is a constraint. But we will evaluate which market pays more, so we allocate where the money is.

It's quite an accomplishment. Like, I mean, your -- this Pinkglow just sells out everywhere I go. And when I talk to the produce managers, it's -- they sell every one they can get and would like more. So it's a good situation for you guys, and they're selling at double-digit prices per pineapple, which is which is incredible, so anyway.

Yes. I mean, in addition to that, Mitch, we used to have a lot of residues from the pink pineapple that we could not export as export quality. And we did -- and we didn't have the opportunity because we didn't have the authorization from the Costa Rican authorities to turn them into juice or to frozen, let's say, IQF product. Thank god,, recently for the last 2 months, we have been granted to feeze or to use this as frozen, and we are processing this, and this is great also addition to our SKUs. Pink also going into ice cream and juices through the food service industrial, I would say, segment.

Changing the subject, moving to fresh-cut fruit. You're doing very well on fresh cut fruit, obviously. Where specifically, is the demand coming from? Is it retail versus food service? Is it equal across the board? Is there any one geography that's growing particularly strong for you guys? Can you talk a little bit about where that growth in demand is coming from and where you see it going?

We see the demand mainly on the retail side. The biggest increase and expansion is on the retail side and the convenience stores. That's where we see the biggest advances as well as -- I mean, we are not talking only in North America, but we are having the U.K., we are having the Middle East region as well. So expansion and growth is actually across the world. And as we speak, we are looking at different countries, new countries to initiate also fresh-cut operations based on feasibility and return on capital, but that's the way going forward.

It's not only in North America, but it's a global expansion. With our expertise, know-how and the vertical integration, supply chain where we have the fruit and the ability to supply each region closer to the markets, the Fresh Del Monte advantage is that it is -- it's not only in 1 continent. It's not only producing Costa Rica, let's say, pineapple, which is the major SKUs in the fresh-cut, we produce it in three different -- four different continents. So we are much closer to the markets logistically rather than just shipping it all the way from Costa Rica to, let's say, to Japan or Costa Rica to Europe. I mean, we have Africa, which is closer. We play with logistics more than just the sourcing.

Okay. and then -- and your margins continue to march forward there as you leverage your capacity investments. Is that something -- I mean, we should -- where do you see the top end of like...

You mean on the fresh cut?

Yes.

The fresh cut, I think the margins would stay more or less in the same region that we see right now. What would be our niche is that we will be introducing more innovation. I mean, let's take guacamole, for instance, fresh guacamole. I mean, we started this almost probably a year or less than a year ago. And we see more than double-digit growth month-over-month, I mean in that category. And we are the only one in the market that can produce fresh guacamole to the retail sector. So that gives you an idea where we are going. I mean, that's the type of products that we -- and type of SKUs that we would like to introduced and not just depend on the traditional type of fruit offerings or vegetables.

Moving to Banana. I -- how -- in your view, the Black Sigatoka, that -- how much has that affected the banana supply in Costa Rica or in Central America? Is that -- is it definitely showing up as a drag on supply?

No. Well, I mean, Costa Rica alone is down over 20% in their export volume this year as we speak. And that tells you -- and it's mainly because of the Sigatoka disease as well as other issues in the soil and the climate and -- so I don't see that this is going away. This is getting worse as a matter of fact, as we speak. I mean it is a disease that disease gets immunity and they -- the disease transforms itself against the kind of chemical that is being used. And over time, that chemical doesn't have any more efficacy for treatment.

And unfortunately, in this space, there is only one supplier in the world that has this product and it's becoming even so costly that it's adding more cost to the per banana box because you have to apply more cycles and to do more applications, which costs you more money. And still, I don't think that there is a cure in my opinion, unless something kind of extraordinary. On our part, we are working on several fronts to find a solution to the Sigatoka. I cannot disclose at this time, but we are doing a lot of work now to find solutions for that.

Okay. And then -- but over time here with the banana supply affected negatively, I guess, should be good for prices, you should be able to get -- I mean, bananas are obviously one of the lowest priced items in the grocery channel. There seems to be some headroom for you to raise prices to offset the supply limitations. Would you see it that way or...

It's actually not our -- I mean it's an industry, it's a supplier's issue. It's not our issue that still -- I mean, we are very much -- we even have lowered our volumes over the last two years in order to maintain profitability and make sense of this business. But the problem is not with the -- I believe the problem is with the existing suppliers that they don't understand that going forward, they cannot survive with such pricing in the market.

Just a couple of other quick questions. It was interesting, you're selling two of your older vessels, as you switch over to -- sort of the legacy to the container ships. Are you going to -- would you consider buying to new ones like you have adding to the fleet? Or are you happy with your current setup? And will sort of lease vessels or however, for your capacity?

No. But what Monica mentioned actually is only for Asia. These two vessels were servicing Japan and Korea markets and that's what we are replacing. We are selling off these ships and using container shipping line now to replace it. As far as North America, everything is also on the table. I mean, we are -- we will do whatever is the best interest of the company, definitely.

Okay. And I mean, are you pleased -- I mean, are you happy with the way your purchase of those six vessels? Is that working out as expected? It seems to be...

And then you can see our cash generation, I think that speaks for itself, Mitch. You look at our cash, I think.

And then a couple of other things. You had a $6 million equity earnings from unconsolidated companies. Which companies are generating that type of profit for you?

Well, actually, we have invested in several funds that are friendly funds that we have been very close with and these are companies that are in the food industry, let's say. And I think we have made the right choices and we made the right investments. And I think that this is just a beginning. I think these are very successful -- extremely successful companies that are already growing double digit as we speak. So we are very, very pleased with what we invested.

Okay. And then last question was just what was the -- I didn't see the Q yet, but the foreign exchange impact on revenue and gross profit, was there any -- can you give us those amounts you mentioned?

Yes. The euro obviously has been getting stronger, which helped us. We do have part of our sales hedged at a little bit lower rate, but it definitely helped. The British pound also was stronger. And the Japanese yen was stronger than last year, even though it's kind of weakened a little bit now, but definitely, those three currencies helped our net sales, but the local selling prices in these markets were also very strong. So it was both scenarios.

But to add to what Monica said that you have to think, there is a tailwind on one side, and we have headwinds on the other side. I mean, Costa Rica by itself is a very, very difficult situation. I mean we used to have equal on exchange rate to the dollar three years ago for 610, 620, and today, we are barely at around 500, 506, 505, which you can say and increased, of course, inflation over the last 2, 3 years, continuous inflation, continuous increasing cost and then the exchange rate is getting stronger, and that's huge headwinds for us.

I mean, added a lot of cost on our production, be it on pineapple, melon or bananas or whatever we do there. So really, when you look at the tailwind, which is the euro or the, but you also have to look at the headwind, and then one offsets again to each other. I wish the Cologne would have been normal as it used to be, then it would have been even much better picture than what we see today.

[Operator Instructions] There are no further questions at this time. I would like to turn the call back over to Mr. Mohammad Abu-Ghazaleh for closing remarks.

Thank you, Desaray, and I would like to thank everyone for joining us on this call today and hope to talk to you on our next quarter with equally good news. Thank you, and have a good day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining.