US-based agribusiness Limoneira Company yesterday (10 March) reported a drop in first quarter agribusiness revenues as a result of lower lemon volumes, but predicts a strong fiscal year overall.
Total company revenue for the first quarter ending 31 January 2016 was US$25m, compared to US$28m the prior year, while its agribusiness revenue was down to US$23.6m from US$26.9m last fiscal year, the firm said.The California-headquartered company attributed the fall to lower lemon sales.
Nevertheless Limoneira predicts strong results going forward this year as a modernised packhouse comes into operation, and additional citrus acreage comes into bearing.
Revenue from lemon sales fell from US$24.7m last quarter to US$21.9m reflecting lower volumes of fresh lemons sold, Limoneira said in a press release.
Approximately 753,000 cartons of fresh lemons were sold during the first quarter of fiscal year 2016 at a US$23.46 average price per carton compared to approximately 869,000 cartons sold at a US$23.40 average price per carton during the first quarter of fiscal year 2015.
The decrease in volume in the first quarter of fiscal year 2016 was primarily due to lower production from the company’s orchards in Yuma, Arizona, the company said.
Avocado revenue was not significant in the first quarter of fiscal years 2016 and 2015. The company recognised US$1m of orange revenue in the first quarter of fiscal year 2016, compared to US$1.5m of orange revenue in the same period of fiscal year 2015.
The lower orange revenue in the first quarter of fiscal year 2016 is primarily attributable to fewer harvest days in January 2016 due to increased rainfall, the company said.
Specialty citrus and other crop revenues were US$0.7m in the first quarter of fiscal year 2016, which is similar compared to the first quarter of fiscal year 2015.
Commenting on the results, Harold Edwards, president and chief executive officer, said: “Our first quarter top line results reflect the typical seasonality of our business and were impacted by lower lemon volumes from our orchards in Arizona.
'Looking ahead, we believe that we are well positioned to deliver a strong year in fiscal 2016. We expect to benefit from additional lemon sales in certain districts/regions as well as more favorable lemon pricing, and we also anticipate realising strong orange sales and pricing in coming quarters.
'Our expanded and modernised Santa Paula packing house is now operational and, beginning in March 2016, is expected to produce meaningful cost savings that will positively impact on our financial results. Based on these factors, we are raising our annual operating income, EBITDA, and earnings per share guidance.”
Edwards added: “Our long-term goal is to be one of the leading global citrus agribusinesses. Over the past several years, we have made a number of strategic investments in both the US and internationally that will drive long-term top and bottom line results.
'We currently have approximately 7,600 planted agricultural acres of which approximately 1,500 are non-bearing and are estimated to become full-bearing over the next four years with plans to plant an additional 500 acres in the next two years.
'We anticipate this additional acreage will increase our annual lemon supply by approximately 0.9m to 1.3m fresh cartons as the non-bearing and planned acreage become productive, which our new packing house is expected to efficiently manage.”
