Good day, ladies and gentlemen and welcome to the Fresh Del Monte’s Second Quarter 2012 Conference Call. At this time, all participants are in a listen-only mode. At the conclusion of our prepared remarks, we will conduct question-and-answer session. [Operator Instructions] I would now like to introduce your host for today’s conference call, Christine Cannella, for the opening remarks.

Thank you, Matt. Good morning everyone, and welcome to Fresh Del Monte’s Second Quarter 2012 Conference Call. Joining me today are Mohammad Abu Ghazaleh, Chairman and Chief Executive Officer and Richard Contreras, Senior Vice President and Chief Financial Officer. This call complements our second quarter 2012 press release we made public this morning and you can find that release or register for future distributions by visiting our website at www.freshdelmonte.com and clicking on Investor Relations. This conference call is being webcast and will be available for replay approximately two hours after conclusion of this call. Our press release includes reconciliations of any non-GAAP financial measures we mention today to their corresponding GAAP measures. Before we start, please remember that matters discussed on today’s call may include forward-looking statements within the provisions of the Federal Securities’ Safe Harbor Laws. Forward-looking statements involve risk and uncertainties which are more fully described in today’s press release and our SEC filings. These risk factors may cause actual company results to differ materially. This call is the property of Fresh Del Monte Produce. Redistribution, retransmission or rebroadcast of this call in any form without our written consent is strictly prohibited. Let me turn this call now over to Mohammad.

Thank you, Christine. Good morning everyone. We are very pleased with our second quarter 2012 results. Our performance reflected the continued momentum of a number of strategies we have put in place over the past few years to rationalize our business and cut costs. We benefited again in the quarter from the changes we made at the beginning of the year, whereby we took control of the marketing, sales and distribution of Del Monte’s products in Southern Europe with performance better than expected. As we discussed on our first quarter call, we reduced our supply of banana in key markets in Northern Europe to a level designed to improve profitability and yet maintain our competitive position in these markets. Due to the number of suppliers in this region and the [indiscernible] with the European economy, we believe Europe will remain a highly competitive banana market for the near-term. During the quarter, we saw substantial expansion of our fresh-cut business. We see a strong demand for our products across all delivery channels at grocery retailers, club stores, quick serve outlets and convenience stores and the prudent suppliers like Fresh Del Monte to meet their customer’s needs. We believe this category will remain high growth opportunity for Fresh Del Monte. We will continue to capitalize on our global leadership position and leverage our experience and distribution network to grow market share in these rapidly expanding categories. We also continue to leverage our competitive advantage in our Gold pineapple and Melon product lines during the quarter. Our Gold pineapple pricing rebounded and we continue to command top global market share for this category. Touching on the Melon business, the decisions we have made over the past few years to address the industry of supply allows us to improve our performance in this product line during the quarter. While it's not possible to shield Fresh Del Monte from the effects of the global economic climate, we have taken strong action during the past few years to mitigate market conditions. Despite the challenges, we have continued to offer our products in new markets and through new distribution channels, while at the same time rationalizing product supplies in certain markets and closing unprofitable facilities where necessary to keep Fresh Del Monte on course to be preeminent global fresh produce company. In summary, I am confident in Fresh Del Monte’s underlying fundamental strength and in our commitment to meeting our goals and actively improving and enhancing all aspects of our business. We know that by being proactive maintaining our focus and our strong cash flows and balance sheet we will continue to deliver long-term growth to our valued shareholders. At this time, I would turn the call over to Richard.

Thanks Mohammad and good morning. For the second quarter of 2012 excluding asset impairment and other charges we reported earnings per diluted share of $1.01 compared with earnings per diluted share of $0.77 in the second quarter of 2011. Net sales were $958 million compared with $1 billion in the prior year period and gross profit increased 12% to $116 million compared with gross profit of $104 million in the second quarter of 2011. In addition, excluding asset impairment and other charges, operating income for the second quarter of 2012 was $71 million compared with $56 million in the prior year and net income increased 26% to $58 million in the second quarter of 2012 compared with $46 million in the second quarter of 2011. In our Banana business segment, net sales decreased $41 million to $425 million compared with $466 million in the second quarter of 2011, primarily the result of ongoing supply management in markets in Northern Europe and lower volume in the secondary markets in the Middle East. Overall volume was 5% lower than the last year’s second quarter. Worldwide pricing decreased 4% or $0.67 per box to $14.83. Pricing was higher in Europe and the Middle East; however the higher pricing in these regions was not enough to offset the absence of a product procurement surcharge in North America during the second quarter of 2011 and lower selling prices in Asia due to higher industry supply. Gross profit decreased $3 million to $38 million compared with the prior year period and total worldwide banana fruit cost decreased 3% compared with last year’s second quarter. In our Other Fresh Produce business segment for the second quarter, net sales decreased $23 million to $454 million compared with $477 million in the prior year. Gross profit increased $21 million…

[Operator Instructions] We will go to Scott Mushkin with Jefferies & Company. Please go ahead.

Pineapple volumes climbed quite a bit you said 19%, maybe I missed the color on what drove that during the quarter and if you have any color on that?

Two things Scott, part of it was weather related but also last year remember we had early flowering so we had a surge in volume last year, which actual hurt us.

So, it wasn’t beyond -- kind of -- it was kind of in line with your expectations? I forgot about the early flowering last year.

Right.

Second question, obviously melons seem to be turning the corner, do you think this is a one quarter kind of aberration or do you think this is a path that we're on now where profitability in melons will return and can you talk about maybe the mix of the Melon business. I know you guys trying to do more specialty Melons and what's the mix look like in that business?

The Melon business, I think has been rationalized in my opinion and the situation would be more steady going forward in the future. So what we have taken, the steps that we’ve taken over the last couple of years I think has brought us on the right track. We've seen the Arizona crop to be reasonably well. We just finished a couple of weeks ago and we look at the full crop, the offshore full crop and the Arizona full crop as well to be most steady than what we saw in the past. As far as the mix is concerned, I think we have put the right varieties and the market needs into consideration and that will be part of the whole package.

So nothing to talk on the mix a little bit but probably two or three years ago may be three years ago, it was almost all just kind of regular canteloupe melons right, like that’s mostly what you did?

Well we have now more than three or four varieties that we produce in the market and we monitor the market as we go forward trying to make the ratios as the market needs dictate. However, we are working also on watermelon which is a very important component of our Fresh-cut operation and we develop some variety that could be far better for the Fresh-cut operations than what we have been using before. So this is also part of the mix.

And one more, debts almost gone, clearly you are producing cash so I was just wondering what your thought process is on going forward. Capital allocation, where do you deploy excess cash? Is it acquisitions? Do you increase your buybacks? I think you did some last year, where do we go because the balance sheet obviously is clearly -- most of the debt's gone at this stage.

Yes, we are looking at all options at this stage. We could be looking at -- we cannot go for acquisitions unless it make sense for us. So we would look for the right acquisition as well as buying back our stock. Like I always say when the opportunity is there we will be more than willing, you know. We haven't been seeing large volume being trading in the market recently, so it doesn’t make sense but anyway we take these options into consideration as we go forward.

And at this time we will go to Bill Chappell with SunTrust.

Mohammad, can you walk us through the outlook on the Banana business kind of how this plays out over maybe these next six months, nine months and I am just trying to understand just both on rationalizing Europe and also what you are seeing in the Middle East I mean how does it change your expansion plan in the Middle East and should we suspect volumes to kind of get worse on the year-over-year better before they can get better and how should we look at that?

Well if we take Europe for instance, I don’t think Europe is going to change much from what we see today or in the let's say beginning of this year. Unfortunately, Europe's economic situation is not getting better but worse. Consumption is down and the economy is down. So I don’t expect that we would see any -- hopefully we can have more stable market as today. So we will have hopefully a good market during the first half of the year and then just be able to withstand the bad markets during the summer months. So we don’t see any much changes in Europe. As far as the Middle East, it is being impacted mainly by the Iran -- when we say secondary market it means that the Iran market was a very big market in terms of consumption and import of bananas in general, and since the sanctions have taken place, it has affected their ability to import bananas and the volumes are going to these markets are being diverted to other markets which ultimately impact the pricing and the economic situation in the other markets in the Gulf. To add to this, you know the Far East has also has been impacted by the new steps that China has taken in relation to the Philippine bananas. That they have put in place quarantine conditions to import bananas into China which has limited the ability of Philippine growers to export into China in a regular and meaningful way. So this fruit also has been sent to other markets in the Middle East which has impacted as well the situation. I hope this will not hopefully long term be a kind of a trend, but we do have an advantage being ourselves physically in the Middle East you know I mean Del Monte offices and distribution centers in the area and it gives us an advantage over other importers in being able to reach our customers and be able to help moving the fruit there without too much impact. That's as far as the markets. North America is more stable, you know that's a contracted business, so we don't see much. On the supply side, nobody can guarantee anything, you know I mean in the last couple of days last weekend we saw a big flooding in Costa Rica which has affected some of our farms as well as I believe other farms in the area which we haven't yet seen the impact, but we know that there is side effects which means we lost maybe certain volumes and hopefully that will not be in a meaningful way that will affect our supplies going forward, but we should be able to quantify this maybe in the next few days. That's it.

So it sounds like barring the impact of a flood which we will get an update on. Do you feel like what you've done to rationalize supply is kind of in line with what you're seeing externally?

Yes, yes.

Okay, and I mean have you seen any changes on year-over-year pricing since the end of the quarter? I mean has it gotten actually worse or is it holding pretty stable?

In what market?

Particularly in Europe.

In Europe, it is more or less stable. Since late June it hasn’t been, it's been more or less on the same level.

Okay, and then just switching gears, can you just give us a little update in terms of CapEx spend you know, where we are on the Tomato business and how this quarter impacts kind of that outlook?

We're done with the CapEx on the Tomatoes. That was completed early in the year.

So, it's now just driving through that model as we move into next year.

Correct.

At this time, we will hear from Bret Hundley with BB&T Capital Markets.

It's actually Heather Jones. I don’t know if -- I think I missed [indiscernible] to your answer to Bill just now. In the Philippines China issue, what did you say as far as pricing? Has that started to drive down pricing in the Asian market?

Definitely yes, I mean, you have two elements here. One is the summer months which naturally drives down the prices. I mean, you know, in the summer we don’t have the same pricing that we see during the winter. And secondly, more volume is being supplied into the Japanese and Korean market that used to go to the Chinese markets. So that has also impacted prices negatively.

I mean, the things that we’re reading are suggesting that Philippines volumes are actually getting into China. They’re just down substantially. I mean could you put a figure on that as to how much are volumes into China down year-on-year and I understand that pricing weaken seasonally, but I am thinking in terms of the year-on-year basis, like what kind of year-on-year declines are we’re seeing in Asia at present?

In Japan, for example, price is up slightly over last year in local currency, but obviously it would be even higher if it wasn’t for these issues. We don’t know industry wide how much volume is not, but there is certainly a lot of volume that’s not getting in to China.

But I mean would you concur with what we've read that some volume is -- some Philippines volume is making its way in to China or is that just inaccurate?

Yes, some volumes are going to China definitely. I mean we sent some volumes, but compared to what we used to export into this market earlier, I mean it's very little really.

Okay, one just detail question. Given the issues with Supervalu, do you guys have a substantial receivables exposure to them?

No, not much.

Okay, then moving on to southern Europe. Our work shows that Southern Europe is far weaker than Northern Europe and wondering if you could comment on that and what your outlook is for Southern Europe in particular?

Well in our case, I think that in our case we have a strong Southern Europe pricing as far as pineapple is concerned, as far as bananas are concerned. We have had decent and nice pricing during the last -- since the beginning of the year. So I don’t know -- may be you different information, but from our side I think like I said we had very a favorable situation in Southern Europe during the last several months.

And what is your view of Europe like, if I think of like three to four years, I mean you have got a severe pressure on the euro. You had greater fragmentation of the market over the last few years, some of that’s reversing now with the line of services somewhat backing off. What is your view on that market. I will think that you would need to get tighter supplies into that market to list local pricing so that everyone can make decent margins. But how long do you think that will take, where do you think we are in the process. If you could just give more like a three to five-year outlook on that market.

You are asking me the one million dollar question, but anyway I think that Europe will not improve in the near term. I believe that three, five years from now hopefully whoever is still standing there will be able to continue and enjoy maybe a better market in the future. The problem that we are facing, Heather, is not really only the market in Europe, but it’s the supply, oversupply situation in the producing countries. We are seeing more logistically anybody can bring bananas or any type of fruit into the market by truck loading a container or even mix the container. So it’s more a competitive environment than just the market. Unless the supplies are down, unless the shipping means are limited in a sense that -- it is not limited but at least the pricing is higher. I mean you can -- the container today is, the freight is very competitive, so you people are encouraged to buy fruit at depressed prices like in Ecuador and bring that fruit into the markets and trying to make some money. But unfortunately, all this is helping to press the markets further and keep it under depressed conditions. And I don’t see how this can change, unless as I said the supplies have to be rationalized which I doubt that can be done and that the reefer containers or the shipping lines will start to understand that they cannot continue doing what they are doing. But this also is a very difficult question because more ships are being built and more containers are being produced, so all in all I don’t see that in the next two, three years anything will change.

And really going back to your comment about Ecuador, we are reading stuff and talks about farms being put up for sale, government starting programs to put banana production into alternative uses; I mean is that the production that you believe needs to be, not needs to be, but is most likely to be rationalized as in Ecuador?

I hope so, that this is the right course to go. I mean there is no question about it that Ecuador has been a determining factor in the oversupply situation in the world and unless supply is more rationalized and more controlled in a way that the growers would be able to survive. That's the most important thing. But I don't see that to happen soon really. I don't believe that the government or anybody can stop people from producing bananas and selling bananas unless they themselves get to be able to put other products in the land that could be more profitable to them or at least give them the same income that they are getting from bananas. I don't see how this is going to change.

Okay, and my final question is on avocados, that's actually one of the big bright spots in the produce aisle; just very strong demand growth, good pricing and you guys have been in that business, I don't know for like five to 10 years and just wondering if you have any plans to become a more meaningful player there?

We are definitely working towards that. We are very much making inroads. We have already started some presence in Peru to complement our mix. We do have our 4 trillion avocados and we do have a steady business from Mexico as well as California. So we are very much into the, and we are not you know, we think that this is a huge potential for the future but let's not forget that supply is increasing as well in all different origins. I mean Peru is growing very much, Chile is growing a lot and as we speak now there is over production in all these countries. And the price that we have seen this year so far nothing compared to the prices that we have seen last year for instance. So we need to be careful also about demand and supply you know, people can get away, get excited you know, and they kill the goose before it even starts to run.

And at this time we will move to Jonathan Feeney with Janney Capital Markets.

Mohammad, I wanted to spend a little bit more time talking about the Middle East growth opportunity. I mean obviously, you have had some very good results, some very, very consistent cash flows now for four years, now really five you know, but the magnitude of that Middle East opportunity seems to be, you seem to have barely scratched the surface of what I thought was possible and I am still thinking maybe possible with the growth of some of those countries over there and your logistical presence. So combining that with your extremely strong balance sheet should we, what is your updated kind of outlook on your growth for the Middle East, package foods, juices [indiscernible] specifically and are their opportunities to do acquisitions in that region to augment your presence there already?

Thank you, Jonathan. As you can see, we’ve been growing steadily in the Middle East and we’re yet you know, increasing our market share into the Fresh segment. It just started as a matter of fact. We have started in Saudi Arabia only about literally in about less than two years. So you can say that this is a soft opening. Right as we speak now, we're increasing, we're getting very strong into the Fresh-cut business in these markets. We’re producing juices that would be manufactured in the countries. We're starting a lot of added value products that will be meaningful as of end of this year hopefully. So I think that as you said these markets are very promising. These markets has huge potential and we're capturing this, but we’re very careful people, you know, we like to be cautious and look at the opportunities in a very let's say sensible way. So, you will see growth, you will see continuous expansion in these markets and you will see continuous increase and revenues as well. So we are very kind of encouraged and optimistic and time will tell.

[Operator Instructions] And at this time we will move to Eric Larson with CL King.

Mohammad, kind of based on the last question. Looking at sort of your scenario for kind of excess supplies in quite a few fruits in quite a few countries going forward. Obviously that puts pressure on pricing overtime and it obviously challenges your desire to have profitable and when I say profitable I mean profitable growth. You just don’t want to give product away. Does it mean that you actually have to be more aggressive in adding more value to your product i.e. your juices and fruits and does it mean that you have to take even a broader global approach to that and can you acquire to get that capability. How do you look at -- when you look at your P&L obviously you have rationalized a lot of businesses, but looking at your P&L this quarter, terrific gross margins, but basically your sales are down across the board. Now again there is specifics to each market. How do you really look to get that top line growing modestly again with really profitable growth. Is it going to be focused on Fresh-cut and value add elsewhere than just the Middle East and UK and elsewhere?

Yes definitely just to start on the sales, the sales decrease was predesigned. I mean that was our intention. And I mean it wasn’t just because of any other reason except our own rationalization of the business. So I would prefer like I always say that it is bottom line rather than just showing more revenues and losing more money to start with. Secondly you know from the inception of our operation, ourselves, 15 to 16 years ago. We work very clear in our policy and our direction. We haven’t changed from that kind of course, of course during that timeframe we have learned from mistakes. We have done some decisions that might not have been the best for our business but we have learned from that, but we haven’t changed course. From day one, we believe in vertical integration, we believe in adding value to the chain through all the operations. We have always thought of -- I mean in the Fresh-cut operations that we have, we almost started from zero really at the very beginning and now what you see well it is - and how it is gone. And that is going to grow further. I mean that is not going to grow only in North America, but it will grow hopefully in Europe, it will grow also in Japan, it will grow very well as well in the Middle East. We have other areas, like you said I mean we aren’t talking about juice. We are not talking about juice by - we are actually building our own plant. Be it in the Middle East, be it in Africa or other places that we go and stream as I said by the end this year we will see from the moment in that direction. As a matter of fact we have gone into frozen French potatoes for instance. That is a new item that we have gone into recently in Saudi Arabia and that's one of the projects that we look at in the future. Looking at projects that would add value to our portfolio. We are not talking only about -- we are a food company, we consider ourselves a food company, not just as a fresh produce company and that's what we are transforming Fresh Del Monte to be in the coming years.

Yes, its very encouraging, I mean you've delivered what you said you were going to deliver. You've got I think it’s the first double digit -- your gross margins are over 12% in the quarter. I think it's the first double digit gross margin in some time. And the reason for the question is and obviously you have purposely reduced your sales in low margin or products that are losing money et cetera. And that is very encouraging. And if you could tailor on some growth and maintain the margins that you have today, it would be very encouraging. So that was the reason for the question.

And at this time, it appears we have no further questions in the queue. I will now turn things over to Mr. Abu Ghazaleh for any closing remarks.

Thank you ladies and gentlemen for attending this call and hope to be with you on the next call with better news. Thank you and have a good day.

And once again this does conclude today's conference call. Thank you all for your participation. You may now disconnect.