Alico, Inc., one of Florida’s largest citrus producers, announced financial results for the second quarter of fiscal year 2020 and the six-month period ending March 31. Some highlights regarding the company’s citrus operation follow.
For the six-months ending March 31, Alico Citrus harvested approximately 5.61 million boxes of fruit, an increase of 23.3 percent from the same period a year earlier. The increase was principally related to the harvest of more Valencia fruit. The company has seen a reduction in its average realized/blended price per pound solid, from $2.36 in the prior fiscal year to $1.81 in the current fiscal year. The reduction in price was largely due to the Florida citrus crop being greater than expected in the 2018-19 harvest season, leading to excess inventory levels in the current harvest season. Also impacting the price reduction was the continued inflow of imported fruit.
The company expects to complete its current year harvest season by mid-May. To date, the company’s harvesting activities have not been impacted by the coronavirus pandemic, and there has been no disruption in delivering fruit to processors. The company stated that it is encouraged by a measurable increase in not-from-concentrate (NFC) orange juice consumption by retail consumers during the past quarter. The increased consumption is reducing inventory levels at Florida citrus processors and is expected to improve market pricing next season. Learn more about surging OJ sales.
“As expected in fiscal year 2020, Alico will realize lower profits and lower rates of return this year as a result of lower market prices for citrus fruit,” stated John Kiernan, president and chief executive officer. “However, we are encouraged by the recent increase in demand among retail consumers for NFC orange juice, which, when combined with the impact of lower levels of imported juice, potentially will improve market pricing next season as processor inventory supplies decrease.”
For the six months ending March 31, the company earned net income attributable to Alico common stockholders of approximately $4.4 million and earnings of 58 cents per diluted common share. That compares to net income of approximately $5.1 million and earnings of 68 cents per diluted common share in the prior year. The decrease in net income is due in part to a decline in the market price per pound solids for citrus fruit this season.
During the six months ending March 31, the company received approximately $4.6 million of additional proceeds under the Florida Citrus Recovery Block Grant (Florida CRBG) program relating to Hurricane Irma. To date, the company has received $20.2 million of proceeds under the Florida CRBG program.
Kiernan added, “For the first time since 2015, excluding our purchases of small citrus groves within its existing grove, Alico has purchased a new citrus grove. Although only 334 acres in size, this well-managed grove in Polk County is adjacent to another Alico citrus grove.” He said Alico anticipates the proximity of the groves “will allow us to realize operating economies of scale. This transaction was done in coordination with the sale of a small portion of the east side of Alico Ranch.”
See the full Alico report here.
Source: Alico, Inc.