Alico Discusses Second Quarter Status

Josh McGillfinancial, Industry News Release

Alico, Inc. announced financial results for the second quarter of fiscal year 2023. For the six months ended March 31, 2023, the company reported net loss of approximately $10.9 million, compared to net income of approximately $30.8 million for the six months ended March 31, 2022. This was primarily due to 1) the timing of the gains on sale of real estate, property and equipment and assets held for sale and 2) a decrease in the gross profit primarily due to the lower revenue as a result of the reduced fruit production due to the accelerated fruit drop caused by the impacts of Hurricane Ian.

Photo courtesy of Alico, Inc.

In addition, the company experienced cost increases in fertilizer, herbicide, labor and fuel in maintaining its groves. These cost increases coupled with lower box production resulted in a higher cost of sales per box as compared to the same period in the prior year.

For the six months ending March 31, 2023, Alico Citrus harvested approximately 2.3 million boxes of fruit, a decrease of approximately 45% from the same period of the prior fiscal year. The early and mid-season harvest was down 55% compared to the prior year. The Valencia harvest was down approximately 33% compared to the same period in the prior year.

Alico’s average realized/blended price per pound solids for the period increased by approximately 3.1%, as compared to the same period of the prior year. The company anticipates market prices in the 2022–23 harvest season to be consistent with 2021–22 prices, largely due to low levels of inventory stocks at the juice processors and a tighter global supply of oranges.

John Kiernan, Alico president and chief executive officer, commented, “The Alico management team is focused on the caretaking of our groves and preparing them for the 2023–24 harvest. Based upon prior experience with storms of this nature, we anticipate it may take up to two full seasons, or more, for our groves to recover to pre-hurricane production levels.”

Kiernan noted that Alico maintain crop insurance on all of its groves. “In addition to the approximately $4.8 million received in the quarter ended March 31, 2023, in the month of April we have received additional crop insurance proceeds of approximately $8.9 million,” he reported. “We have additional claims pending and have been working closely with our insurers and adjusters to determine the remaining amount of insurance recovery we may be entitled to.

“In December 2022, the federal government passed into law the Consolidated Appropriations Act, and funds were earmarked for disaster relief. However, the mechanism of the funding is still unclear, and additional legislation has been introduced to allow the funding to follow the mechanism established for Hurricane Irma relief funds. We continue working with Florida Citrus Mutual, the industry trade group, and government agencies on the federal relief programs available under the Act.”

Kiernan also noted that Alico has started to test oxytetracycline as an HLB mitigation method in its groves. “We began treating our trees on January 16, 2023, as the product and application devices became available, and treated approximately 10% of our trees as of March 31, 2023. The extent of any benefit of the OTC application will not be measurable until the completion of the fiscal year 2024 harvest.”

Source: Alico Inc.

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