Thursday, November 13, 2003

Mac nut firm loses
$9,000 as sales slip

ML Macadamia Orchards'
president expects the price
of nuts to rebound

ML Macadamia Orchards LP, Hawaii's biggest grower of macadamia nuts, yesterday announced third-quarter earnings dipped slightly as nut revenues fell by 5 percent.


The company reported a third-quarter loss of $9,000 on total revenues of $5.2 million, or a loss of less than a penny per unit. Last year, the company reported a net income of $43,000 on $5.1 million in revenues, with earnings at 1 cent a unit.

Nut revenues declined to $3.8 million for the three months ended September 30, 2003, compared with $4 million last year. Farming service revenues were $1.4 million or 23 percent higher than the $1.1 million of revenues reported during the year-earlier quarter.

While there is still some uncertainty over the price Moana Loa Macadamia Nut Corp. will pay for 2003 deliveries, as indicated by the company's decision to slash dividends in September, company officials say they feel good about third-quarter results. Mauna Loa Macadamia is the exclusive purchaser of ML Macadamia's nuts.

"There's some conservatism reflected in the third-quarter results, but we feel good about the quarter. We believe the industry will continue to thrive and do better in the coming years," said Dennis Simonis, president and chief operating officer.

Nut prices will continue to rebound and the company's harvest will improve, Simonis said.

ML Macadamia, which owns or leases more than 4,100 acres on the Big Island, said orchards in the Kau region were affected by dry conditions, but received adequate rainfall in the first nine months of 2003 and the harvest has improved.

The company is still concerned about the dry weather it has experienced for three years in Kau, however officials expect the crop will continue to rebound, Simonis said.

"It's still very dry in Kau, but our crop is up about 20 percent over last year," he said. "It has rebounded quite nicely and we've gotten enough rain."

Overall, macadamia nut production was down 5 percent to 8 million pounds from 8.4 million pounds harvested last year, he said.

Macadamia kernel prices are up by as much as 30 percent as compared with last year. Australia, one of Hawaii's largest competitors, has struggled with poor weather and the exchange rate has turned in the United States' favor, Simonis said.

"That's led to a shortage and higher prices, which will work its way back to the growers," Simonis said.

Meanwhile, Farhard Fred Ebrahimi, president and chief executive officer of Denver-based Quark Inc., has continued to increase his family's holdings in the company over the past several years and now owns 12 percent, or 898,700 shares, of the 7.5 million outstanding shares, more than any other shareholder. Ebrahimi's company, Quark, makes the desktop publishing software QuarkXPress.


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