Chiquita says cost increases will be offset in 2008; improved operating performance expected

By Jennifer Lanning Drey

Portland, Ore., June 24 - Chiquita Brands International Inc.'s chief executive officer Fernando Aguirre said the company expects cost savings initiatives, pricing gains and favorable exchange rates to offset higher costs in full-year 2008.

"As a result of that, we expect to post a significant improvement in our operating performance for the full year of 2008, despite the rising cost environment," Aguirre said during a Tuesday presentation at the Wachovia Nantucket Equity Conference.

Chiquita expects to generate about $30 million of internal cost savings in 2008 as well as an additional $65 million to $80 million of savings through its restructuring program.

"Every business is facing major cost challenges. Chiquita and the industry are no exception to that, but the difference is that we have tried to turn every one of these into opportunities to continue forming the solid foundation for the growth of the future," Aguirre said.

Chiquita's top priority is improving its profitability, which the company plans to do, in part, by leveraging its brand strength to deliver innovate, higher margin products, he said.

The company expects to post a strong second quarter, followed by a third-quarter loss due to expected seasonality and a "normal" fourth quarter, he said.

"We are running this business for the long term and we are very confident and pleased that this year will be better than last year," Aguirre said.

Chiquita is a Cincinnati-based fruit and vegetable importer and processor.

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