Nut grower's net off 28% in quarter
ML Macadamia Orchards LP, the state's largest macadamia nut grower, said yesterday its third-quarter net income fell 28 percent, despite a healthy harvest.
The year-earlier quarter was boosted by price adjustments and an insurance payment for a weak harvest.
The Kona-based company, which is mulling a deal to expand into processing and marketing nuts, yesterday posted earnings of $85,000, or 1 cent per Class A unit, compared with $118,000, or 2 cents a unit, a year earlier.
The year-ago quarter's results were boosted by a favorable nut price adjustment of $552,000 and a crop insurance recovery payment of $168,000 for a previous low harvest from the crop year that ended in June.
Revenue jumped 46.8 percent to $5.5 million from $3.7 million.
ML Macadamia, which had predicted "a fairly strong crop" in the second half of this year, said last quarter's harvest came in 78 percent above year-ago levels as well as 8 percent above historical norms.
"It was weather related because of when the nuts crop," said Dennis Simonis, president and chief executive of ML Macadamia. "Because of certain weather patterns, we had an earlier harvest. Normally, it starts around September, October. Actually, it started in July this year."
Nut sales gained 51 percent to $4.3 million from $2.8 million while contract farming revenue increased 33.6 percent to $1.2 million from $897,000.
The partnership signed a nonbinding letter of intent last month to buy the assets of MacFarms of Hawaii LLC, and agreed to lease the 3,912-acre macadamia orchard owned by MacFarms affiliate Kapua Orchard Estates LLC.
ML Macadamia, which is still conducting its due diligence on the proposed purchase, owns and leases a total of 4,169 acres of orchards and produced 21.7 million pounds of wet, in-shell nuts in 2005. Approval of the transaction is contingent upon the approvals by the board of directors and unitholders of ML Macadamia, and by the members of MacFarms and Kapua.