Alico, Inc. has reported its financial results for the third quarter and the nine months ending June 30, 2024. Key highlights include:
- Sales Agreement: The Company has secured a new three-year contract to supply oranges to Tropicana, with prices projected to be 33% to 50% higher than last season’s average.
- Tree Treatment: Alico has treated nearly all of its 4.5 million producing trees with Oxytetracycline (“OTC”), expecting significant production growth for the 2024-25 harvest season.
- Real Estate Expansion: Alico has strengthened its real estate division by hiring Mitch Hutchcraft as Executive Vice President of Real Estate.
- Leadership Transition: The Board of Directors has announced that Adam Putnam, a current Director, is slated to become Chairman in February 2025, succeeding George Brokaw, who will remain on the Board.
- Land Sales: The Company has sold 798 acres of citrus land for approximately $7.2 million and has offered an option to purchase an additional 680 acres at the same price.
- Financial Metrics: As of June 30, 2024, Alico’s balance sheet remains strong with $94.8 million available under credit lines, a Working Capital Ratio of 2.67, and a Debt to Total Assets ratio of 0.20. Net income attributable to common stockholders was $(2.0) million for the three months and $25.1 million for the nine months, compared to $11.8 million and $0.9 million for the same periods in 2023. The decrease for the quarter is attributed to $17.5 million in Hurricane Ian insurance proceeds received in 2023, partially offset by a $4.4 million gain from land sales in 2024. The increase for the nine months is due to gains from the sale of land and adjustments related to Hurricane Ian.
Operational Performance:
- Harvest Results: Alico harvested approximately 0.8 million and 3.1 million boxes of fruit in the three and nine months ending June 30, 2024, respectively, compared to 0.4 million and 2.7 million boxes in the previous year.
- Price and Quality: Pound solids produced increased by 17.0% for Early and Mid-Season and 7.6% for Valencia, with prices per pound solids up by 3.8% and 4.1%, respectively, thanks to better contract pricing with Tropicana.
- Future Outlook: Prices per pound solid are expected to rise further next year due to the new Tropicana contract. The Company anticipates that it may take another season or more for groves to fully recover to pre-Hurricane Ian production levels.
Land Management and Other Operations:
- Revenue Trends: Revenue decreased by 34.8% and 10.6% for the three and nine months, respectively, due to reduced hunting lease income following land sales. Operating expenses decreased by 19.2% for the quarter but increased by 15.3% for the nine months, largely due to mining permitting costs.
Management Commentary: John Kiernan, President and CEO, expressed gratitude for investor support amid Hurricane Debby and highlighted the company’s resilience. Despite challenges from Hurricane Ian, Alico is optimistic about recovery, bolstered by substantial tree planting, OTC treatments, and improved contract pricing. Alico’s real estate strategy continues to evolve, with recent land sales and a focus on maximizing property value. The Company remains financially robust and prepared for potential weather-related disruptions. Additionally, Adam Putnam will assume the role of Chairman of the Board in 2025, bringing extensive experience in agriculture and public policy.
Alico’s ongoing commitment to citrus production and strategic land management aims to provide stability and growth for shareholders.
