ML Mac has first-quarter gain from nut harvest
ML Macadamia's crop was four times larger than last year's
ML Macadamia Orchards LP finished in the black for the first quarter after a year-earlier loss, as a large crop nearly quadrupled nut sales.
Even though the partnership received a lower nut price -- 70 cents a pound -- than the 76 cents a pound it received a year earlier, the greater-than-normal first-quarter harvest more than made up for that shortfall. ML Macadamia produced 3.3 million pounds of wet-in-shell nuts versus 785,000 a year earlier.
Net income was $346,000, or 5 cents per Class A unit, compared with a net loss of $100,000, or 1 cent per Class A unit, a year earlier. Total revenue, which also included the partnership's contract farming operation, more than doubled to $3.4 million from $1.5 million.
"It was a strong quarter and we were happy with the price, but we do expect prices to be lower in the second half," ML Macadamia Chief Executive Dennis Simonis said.
Under the partnership's new contracts, it receives a fixed price for its nuts from buyer Mauna Loa Macadamia Corp. and market-based prices from purchasers MacFarms of Hawaii LLC, Hamakua Macadamia Nut Co. and Island Princess Mac-adamia Nut Co.
Simonis declined to comment on the status of ML Macadamia's nonbinding letter of intent to buy the processing and marketing assets of MacFarms. The deal initially was expected to close early this year, but has been delayed more than once.
ML Macadamia has said that the acquisition will provide the partnership a higher level of revenue stability, margin growth and insulation against volatile market prices.
In the first quarter, macadamia nut sales rose to $2.3 million from $600,000 a year ago while contract farming revenue increased 12.8 percent to $1 million from $923,000.
"The vast majority of the partnership's financial results will be determined by the third- and fourth-quarter harvest levels and the nut prices paid under the respective nut purchase contracts," the company said in a statement.