Good day, ladies and gentlemen and welcome to the Fresh Del Monte Produce Q2 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time [Operator Instructions] As a reminder, today’s conference call is being recorded. I would now like to turn the conference over to Christine Cannella, Assistant Vice President, Investor Relations. Please go ahead.

Thank you, Candice. Good morning, everyone, and welcome to Fresh Del Monte’s second quarter 2016 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 press release we made publish 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 risks 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 the call over to Mohammad.

Thank you, Christine. Good morning, everyone. I am very pleased with our solid results in the second quarter of 2016. The overall performance validates the strength of our long-term diversification strategy. During the quarter we continue to expand our global value-added fresh-cut business with new customers, venues and products. Fresh-cut fruit and vegetable consumption continues to grow at a rapid base. Due to raising consumer demand for a variety of healthful ready-to-eat food product at convenient Fresh’s point. We continue to pursue strategic growth opportunities in the fresh-cut industry by expanding the markets and customers we serve. Including a new production facility that recently opened in Seoul, Korea. And a facility in Paris, France scheduled to open in September. We also saw strong growth in our avocado business supported by Fresh Del Monte’s industry leading distribution network and value-added ripening capabilities. As a result we look to further capitalize on growing demand in the avocado category. As part of our diversification strategy we expanded our global presence during the quarter by acquiring additional acreage for our blueberry farms in Chile. During the quarter we faced a decline in industry-wide banana supply due to unfavorable weather conditions that drove the average per box price higher but decreased our sales volume. Weather patterns also disrupted our chilli and fruit supply as well as significantly lowering the pineapple production in our growing areas that further lower our sales. Looking forward we will focus on our diversification strategy and leveraging our infrastructure. What you see today is only the beginning of my vision. We will continue our momentum and do what we must do to improve our efficiencies. Maximize our resources and implement strategies to further enhance our profit potential. I would like now to turn the call to Richard.

Thank you, Mohammad, and good morning. For the second quarter of 2016, on a comparable basis excluding asset impairment and other charges and gain on sale of assets. We reported earnings per diluted share of $1.75 compared with earnings per diluted share of $1.18 in 2015. Net sales decreased 4% compared with the prior year period. Gross profit increased 28% to $145 million compared to $114 million in 2015. Operating income for the quarter was a $101 million compared with $72 million in the prior year and net income was $90 million compared with $63 million in the second quarter of 2015. Now turning to our business segments. For bananas net sales were $497 million compared with $514 million in the second quarter of 2015 due to lower sales volume in Europe, North America and Asia, the result of lower industry supply. Overall volume was 5% lower than last year’s second quarter. Worldwide pricing increased $0.24 per box to $15.30 per box primarily in Europe and Asia partially offset by unfavorable exchange rates. Total worldwide banana unit costs decreased 4% due to lower transportation and fruit costs. And gross profit increased $22 million to $67 million compared with $45 million in the second quarter of 2015. In our Fresh-cut business segment for the second quarter, net sales decreased $27 million to $497 million compared with $524 million in the prior year. Gross profit increased $5 million to $60 million compared with $55 million in the second quarter of 2015. In our Gold pineapple category net sales decreased 19% to $123 million during the quarter as a result of lower sales volume. Volume decreased 25% due to lower yield from our plantations in Costa Rica and the Philippines brought about by adverse weather conditions. Unit pricing was 9% higher and unit…

[Operator Instructions] And our first question comes from Jonathan Feeney of Consumer Edge Research. Your line is now open.

Good morning. Thanks very much for the question.

Good morning, Jonathan.

I guess two questions. The first one is I'm a little bit surprised by the sudden apparent change in the – it would appears to be the supply demand balance in the banana business. Can you talk a little bit - can you separate at all from what might be structural for what is just the ordinary kind of cyclical supply demand factors. Is there any structural factor out there that's making the banana business more profitable on a permanent basis? And I have one more question after that please.

I don't know if you are talking structural from production point of view or other areas.

Either way production or competition I mean you’ve seen couple companies - you've seen some changes in ownership of the companies, you’ve seen some changes to the way over the past few years anyway, the way governments enforce minimum export pricing, so at different times at different factors whenever there's a big what I view as a positive surprise anyway. I'm just kind of trying to understand if finally this is an industry that seems to be with companies committed to returning a strong return on their capital.

Yes. That's true, but as far as production itself I think that structurally production in the tropics which is the main producing areas haven't really changed significantly in terms of acreage or plantation. However, during the last seven, eight months we have witnessed some type of – in some area there was drought, so there was less production in general especially in Ecuador, where prices have significantly increased. In our case, we had supply on demand more or less in line actually and we didn't faced major I mean shortages, we did face shortages and that reflected our revenue. But as far as the market is concerned, I believe that there is more I would say in a very shy way that there seems to be some type of improvement or some type of kind of more pragmatic and let say rational behavior in the market. So we can't be sure, but we look forward to a better market conditions.

Thanks. And just one other question on the Prepared Foods business, 20% gross profit. It would seem to me that I mean pretty significantly expanded, is that – it seem to me there is a – I mean there is a lot of stuff in there, there is everything from some juices to some products, I mean European products to fresh products. I mean is it mix that's driving that higher – such higher margin stuff is the stuff that's growing? Or is that across the Board margin or leverage or something else that I’m not understanding driving that. What is that sort of long-term good margin for that business – for gross margin your report?

The good margin for this business is between 15% to 20% in my opinion that should be a decent margin for Prepared business. But in our case, we have realized over the last couple of years that supermarkets were going for cheaper than and I’m talking here Europe and other areas, we are not Prepared in the U.S., but in all our markets where we had the brand. We noticed that the supermarkets realizing that they need to start a very premium brand in their supermarkets to be able to sell better. And they have experimented during the last few years and they failed in many cases. And now we see supermarkets coming back to us, retailers asking us to put back Del Monte on the shelf. And Del Monte has a premium pricing, of course compared to other brands or private label. So that’s one side of the final story. The other side is that pineapple business has been very strong in the last couple of years and it seems that it’s an ongoing situation for the future as well albeit in the can business or on the juice business. So that’s an area that the same thing happens for all the other products that we are producing like peaches and for cocktail and all the other products that we are producing, this also are doing very well, as well as identifying into new products either through our farm production or packing through third-parties. So all-in-all I think it comes from many areas, better marketing, better sales, retailers realizing that they need the brand now and so manufacturers work together to improve the margins on the business and improve the business in general.

Great. Thank you very much.

Pleasure.

[Operator Instructions] And our next question comes from Mitch Pinheiro of Wunderlich Securities. Your line is now open.

Hi. Good morning, everyone.

Hi, Mitch.

Hi. So back to the banana business, it supplies height why weren’t prices higher?

Well, we have contracts in place that happened last year, I mean when we start supplying during 2016 most of this contracts were signed in 2015 and some of them of course, signed in the first quarter or in the first few months of 2016. So we haven’t – I mean prices could be better and should be better, but in my opinion that we see an improvement in the marketplace, which is very encouraging for us. And that’s what really matters is that we see a tendency that prices hopefully in the future should improve.

So in the North American business where it's mostly contracted so is it fair to assume that the contracts for calendar 2016, you saw pricing on average up in sort of these low single-digit area. Is that a fair assumption?

Yes. That is fair. And also in North America, we have fuel surcharges and obviously that came down a bit too, so that's reflected in the net price you see.

And also then and staying with sort of that topic or costs, if ocean freight costs hurdle were down 24% and if it's 9% a cost of goods, you've got roughly say 200 basis points of gross margin tailwind from ocean freight alone. Is that about right?

Yes.

Okay. And how does that, you know, how do you view ocean freight for the remainder of the year? I know you’ll start confident against easier costs.

It’s not getting worse, it’s getting better to all the people I believe that – and I believe this situation is going to continue for many years to come. I don’t believe that the situation in the freight and the oil is going to change in a short period of time.

Okay. And then when – just looking at fresh-cut, the fresh-cut business, it grew 9%. I think you described it part some expanded product line, but also new customers. What's the right growth rate to kind of think about the fresh-cut piece as you look out over the next 12 months? Does it get to a – is it in this range or do you see it accelerating at all with your new customers?

No we would like to continue at this range because there is capacity constraints as well. I mean, we can grow by 15%, but if you don't have the capacity – this is not just like we turn the key and start producing it at the fixed time and preparation to keep increasing volumes. So that 9%, 10% that will be great growth year-over-year.

Okay. And just a couple more questions. You said the CapEx in the back half roughly $100 million, $90 million to $100 million. What is that going to be? What are you planning to spend that on?

The major part of that would be our Philippines new plantation in bananas and pineapples. We have a project that is going on now and we will have the largest and most modern packing – avocado packing plant in Mexico by next year. So that's one of our major as well investments which is ongoing where you speak.

Is that one in Jalisco?

No, I would say it’s another area, but this would be the last and the most update – most modern and largest in Mexico when it’s done and finished.

Okay. And then just you sold some surplus land, is that I mean I know your vertical integration is one of your key strategies, is that just – was that just unarable land or…

This is not agriculture land, it was a piece of land that we had that nothing to do with agriculture. As far as I think the buyer needed the land and we didn’t need to – it wasn’t so important to keep [Cape Town] agreement and we sold it.

And your blueberry business I mean is that new land that you purchased? Is that what I heard?

Yes. That’s new land. We have an existing blueberry farms since over 20 years in Chile, we’ve been producing blueberries in the South, but since we decided to go into the berry business as we – I said on previous occasions, now we are running up the production of blueberries and other berries and I hope by next year, we will be an important player in this field.

And would that be a North American – is that product here for North America or other?

No, this will be globally, this will be a across the UK.

Okay. And then last question was with the reports that [Hanauma] has 2,500 or 3,000 hectors of land perhaps and Fresh Del Monte is obviously mentioned as a potential buyer. Any color you can add to that?

Only watch economies in the business.

Okay. All right. Well, thank you for your time.

Thank you. End of Q&A

Thank you. And I’m showing no further questions at this time. I would like to turn the conference back over to Mr. Abu-Ghazaleh for closing remarks.

I would like to thank everybody for having the time to be with us on this call and look forward to speak to you on the next conference call with good news as always. Thank you very much and have a good day.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. And you may all disconnect. Have a great day everyone.