Wednesday, July 21, 1999

Better harvest helps mac nut
firm show profit

By Russ Lynch


ML Macadamia Orchards LP barely made it into the black in the second quarter of this year with a profit of $16,000, or less than 1 cent a share, an improvement over a loss in the 1998 quarter.

Info Box The second quarter of last year had resulted in a loss of $1.23 million for the Big Island macadamia nut grower. Although most of that was from a charge of $1.12 million for expenses related to a failed attempt to merge with the company then known as C. Brewer Homes Inc., ML Macadamia also had an operating loss of $185,000 in the 1998 quarter.

That improved to an operating loss of $62,000 in the latest quarter. An increase in interest income helped give the company its small profit for the quarter.

The partnership said the operating results, aside from the merger charge, were better because of a much bigger harvest -- 950,000 pounds of nuts in the latest quarter compared with 152,000 in the 1998 period -- and because of a 4 percent increase in price of nuts.

In the 1999 quarter, the business had nut sales of $614,000, compared with $93,000 in the year-earlier period.

For the first half of 1999, ML Macadamia had a profit of $557,000 on sales of $4.1 million, compared with the 1998 half-year loss of $558,000 (including the costs of the failed merger) on sales of $3.5 million.

Macadamia nut production for the full crop year July 1 through June 30 was 20 million pounds, 11 percent less than the previous crop year's production of 22.5 million pounds.

ML Macadamia, whose partnership units are traded on the New York Stock Exchange, grows nuts on more than 4,000 acres of Big Island land. The thinly traded stock rose 6 cents to close at $3.87 on Wall Street today.

Its Kau growing area is in its second year of drought, slowing production to nearly half what it was in the 1998 second quarter, 7.8 million pounds compared with 14 million.

However, its Keaau and Mauna Kea areas, which usually get too much rain, benefited from the drier weather. Keaau production was up 47 percent for the crop year at 10.9 million pounds, from 7.4 million the previous year, and Mauna Kea was up 24 percent at 1.3 million pounds compared with 1.1 million a year-earlier.

C. Brewer Homes had wanted to merge into ML Macadamia for tax advantages, but shareholders of the macadamia business rejected the proposal. C. Brewer, which changed its name to Hawaii Land & Farming Inc. -- the name proposed for the combined businesses -- is seeking to conclude a sale of most of its shares to Hawaii developer and investor Stanford Carr.

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