Fort Myers-based grower and land manager Alico saw its first-quarter profits soar.
In its fiscal quarter ending Dec. 31, net income rose by more than 386% over the year, primarily due to the sale of its real estate.
The publicly-traded company — one of the nation’s largest citrus producers — reported earnings of $3.8 million, or 51 cents a share. That was up from about $800,000, or 11 cents a year ago.
The results included a $3.4 million gain mostly related to the sale of 700 acres from its Alico Ranch in Hendry County — and the sale of mineral rights — to multiple private buyers.
Excluding the gain and other one-time revenues, the company lost 23 cents a share in the quarter. That compared to an adjusted loss of 29 cents a share a year ago.
The latest financial results reflect the seasonality of Alico’s business. Most of the company’s citrus crop is harvested in the second and third quarters of its fiscal year.
In an email, John Kiernan, the company’s CEO, explained the losses are primarily due to the replacement of older trees with new ones.
“Throughout the course of the year we will remove non-producing trees and replace them with new plantings,” he said. “For those trees which are removed that still have a net book value associated with them, we must write them down to zero value.”
In the first quarter, operating revenues rose to more than $13.7 million, up from about $11 million in the same months a year ago.
Through its Alico Citrus division the company harvested about 800,000 boxes of fruit, down 14.6% from the same quarter last year. Not only did the citrus trees produce less fruit, but they dropped more fruit, rendering it useless, further reducing the harvest.
The company has seen stronger pricing for its citrus, mostly because of he higher demand for orange juice, spurred by the coronavirus pandemic. Most of Alico’s fruit is sold for juice.
In the 12 weeks ending Dec. 26, the consumption of not-from-concentrate orange juice rose by 14% over the year, according to data published by Nielsen. Not-from-concentrate means no water has been removed from the juice — and it has not been reconstituted in any way.
The company has seen the prices for its pound solids increase from $1.87 to $2.25. Pound solids are mostly based on the amount of natural sugar squeezed from the fruit.
One pound of solids equates to about a gallon of orange juice.
“We are encouraged by the continued increased consumption of not-from-concentrate orange juice by retail consumers. Since March 2020 we have seen double-digit growth in consumption, which, along with tighter supply, has significantly improved market prices for early and mid-season fruit over the previous year,” Kiernan said in a statement.
The positive trend is expected to continue through the rest of this season, with the later Valencia crop.
Otherwise, the company has not seen any significant impacts from the pandemic.
In the first quarter, Alico received an additional $4.1 million through the Florida Citrus Recovery Block Grant program — boosting it revenues. The statewide program was designed to help growers recover from the devastating losses they saw from Hurricane Irma in 2017.
In total, the company has received $24.2 million from the block grant program.
More land for Alico:Fort Myers-based Alico snatches up more land for citrus in Hendry County
In Alico’s land management and other operations, it reported that revenues rose by $300,000 over the year, primarily due to its decision to no longer pursue a water storage project.
In September, the company sold about 10,700 acres on the western side of its Alico Ranch to the state for $28.5 million. That acreage would have been critical to its planned water storage project so it was abandoned, reducing expenses.
In December, Gov. Ron DeSantis and the Florida Cabinet approved an option agreement to purchase more of the company’s Alico Ranch land — roughly 5,804 acres — for $14.6 million under the Florida Forever program.
The land is located in what’s known as the Devil’s Garden area, a prime area for Florida panthers.
Over the past two years, Alico has sold about 16,000 acres of its ranch land to the state for permanent protection under Florida Forever, the state’s willing-seller land acquisition and management program.
“Alico continues to pursue strategic ranch land sales opportunities,” Kiernan said.
Based on its first-quarter performance, the company is sticking to its financial guidance for the year.
Alico is still projecting profits between $7.5 million and $10 million for the year. With adjustments, they’re expected to fall in the range of $4.5 million to $6.9 million.
Those estimates don’t include any anticipated gains from the sale of real estate or other assets, which could warrant a revision later in the year.
“Our confidence is the result of a combination of our insight into the factors supporting increased market prices, as well as our track record for continued stringent management of our operating and general and administrative expenses,” Kiernan said.
Alico trades as ALCO on the Nasdaq exchange and was trading up along with the broader markets Friday afternoon.