ML Macadamia Orchards posts loss for first quarter

ML Macadamia Orchards LP, the state's largest macadamia nut grower, said yesterday it swung to a loss of $264,000 in the first quarter from a year-earlier profit due to lower production, reduced nut prices and higher cost of sales.

The Hilo-based company's revenue rose 8.3 percent to $3.6 million from $3.4 million. ML Macadamia's nut sales rose 15.4 percent to $2.7 million from $2.3 million while contract farming revenue dipped 7.5 percent to $963,000 from $1 million.

ML Macadamia, which had net income of $346,000 a year ago, sold 3.7 million pounds of in-shell macadamia nuts last quarter, including 2.8 million pounds that were harvested and 941,000 pounds that were in inventory. A year earlier, the company sold 3.3 million nut-in-shell pounds.

The total cost of goods and services sold jumped 31.8 percent to $3.4 million from $2.6 million.

ML Macadamia said its earnings loss per Class A unit was 4 cents compared with a net of 5 cents per unit a year ago.

The company said the average nut price paid to the partnership in the first quarter was 67 cents versus 70 cents in the first quarter of 2007 and 76 cents in the first quarter of 2006. The price that ML Macadamia receives for its nuts is based upon the terms and conditions of its nut purchase contracts with various buyers.

ML Macadamia said the majority of its financial results will be determined by the third- and fourth-quarter harvest levels and the nut prices it will receive from its contracts.

During the quarter, ML Macadamia's unitholders voted to amend the partnership agreement to add processing and marketing capacity. The agreement previously was restricted to macadamia nut farming.

In December, a proposed acquisition of Mac Farms of Hawaii LLC fell through that would have given ML Macadamia access to the second-largest processor and marketer in the state.