Alico, Inc. announced financial results for the second quarter of fiscal year 2024 and the six months ended March 31, 2024. Revenues of $32.1 million for the six-month period were relatively flat as compared to $31.9 million for the same period last year.
BOXES AND POUND SOLIDS
Alico harvested approximately 1.2 million boxes (second quarter) and 2.2 million boxes (six-month period) of citrus, down from 1.4 million and 2.3 million boxes, respectively, in the same period of the prior fiscal year.
The early/mid-season harvest, which has been completed, was up 22% but down 4.1% on pound solids per box.
The Valencia harvest commenced in February and, as of March 31, 2024, the boxes harvested were approximately 19.3% lower than the same period in the prior year due to the timing of the harvest. Pound solids per box for the three and six months ended March 31, 2024, were down 4.2% and 4.2%, respectively, compared to the same periods last year. However, the Valencia harvest was completed in April, and the total boxes and pound solids harvested exceeded Alico’s prior year’s results by approximately 11% and 8%, respectively.
The overall decrease in the pound solids per box for the period was primarily due to continued recovery from the effects of Hurricane Ian. The company expects it will take another season, or more, for its groves to fully recover to pre-Hurricane Ian production levels.
“I, along with nearly everyone else involved in the Florida citrus industry, am disappointed and frustrated with the production realized this past season,” said John Kiernan, president and chief executive officer of Alico. “Fruit quality was poor at the beginning of both crop harvests but improved, but then the rate of fruit drop accelerated. Lower levels of production for early, mid-season and Valencia harvests this season resulted in lower levels of pound solids being sold, which has led to a total inventory write-down of $28.5 million in fiscal year 2024.”
OTC UPDATE
Kiernan said Alico began treating its citrus trees in January 2023 with an oxytetracycline (OTC) product via trunk injection as a citrus greening therapy.
“In 2023, we treated over 35% of our trees with OTC, which was expected to mitigate some of the impacts of citrus greening and also decrease the rate of fruit drop and improve fruit quality,” reported Kiernan. “Although the small crop harvested this season was not impressive, when measured against control groups in each grove, Alico trees that received an initial OTC application therapy did show measurable improvement in yield. However, quality improvements and reduced fruit drop were not noticeably observed this season. The financial incentives in place to offset OTC treatment costs in 2024 have encouraged Alico to double the number of trees it will treat before our next harvest season, and we remain optimistic that production will increase next year.”
PRICE INCREASE
As a result of more favorable pricing in one of Alico’s contracts with Tropicana, there was an increase in the price per pound solids for both the early/mid-season and Valencia crops, of 9.7% and 6.6% for the quarter, respectively, and 3.8% and 6.6% for the six-month period, respectively, as compared to last year.
The company anticipates prices in the 2024–25 harvest season will increase more significantly than the current season’s price increase, largely due to an expected improvement in the pricing of new contracts with Tropicana.
Source: Alico, Inc.
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