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Apr 30, 2023
Limoneira Q2 2023 Earnings Report
Reported revenue of $48.1 million, impacted by challenging lemon and avocado pricing, but strategically shifted towards a higher margin, 'asset-lighter' business model.
Key Takeaways
Limoneira Company reported a slight increase in revenue to $48.1 million for Q2 2023, despite challenges in lemon and avocado pricing. The company is successfully executing a strategic shift towards a higher margin, 'asset-lighter' business model, reducing net debt significantly. They are maintaining lemon volume guidance but lowering avocado volume guidance for fiscal year 2023.
Total net revenue was $48.1 million, compared to $46.8 million in the second quarter of the previous fiscal year.
Agribusiness revenue increased to $46.7 million, compared to $45.4 million in the second quarter of last fiscal year.
Net loss applicable to common stock was $1.7 million, compared to net income of $1.4 million in the second quarter of fiscal year 2022.
Net debt position reduced to $31.5 million at the end of the second quarter of fiscal year 2023 from $105.0 million at the end of fiscal year 2022.
Limoneira
Limoneira
Limoneira Revenue by Segment
Revenue by Segment
Agribusiness Revenue
CapyFin.com Forward Guidance
The Company continues to expect fresh lemon volumes to be in the range of 5.0 million to 5.4 million cartons for fiscal year 2023. The Company now expects avocado volumes to be in the range of 3.0 million to 4.0 million pounds for fiscal year 2023.
Positive Outlook
- Company continues to expect fresh lemon volumes to be in the range of 5.0 million to 5.4 million cartons for fiscal year 2023.
- Company has 700 acres of non-bearing lemons and avocados estimated to become full bearing over the next four to five years, which the Company expects will enable strong organic growth in the coming years.
- Company also expects to have a steady increase in third-party grower fruit.
- The foregoing describes organic growth opportunities and does not include potential acquisition opportunities for the Company in its highly fragmented industry.
- Company expects to receive total proceeds of $115 million from Harvest at Limoneira, LLCB II and East Area II spread out over seven fiscal years.
Challenges Ahead
- Company’s food service business and industry logistics continue to experience slowdown due to supply chain and inflationary pressures on a global basis.
- Company now expects avocado volumes to be in the range of 3.0 million to 4.0 million pounds for fiscal year 2023, compared to previous guidance of 4.0 million to 5.0 million pounds.
- The decrease is primary due to weather-related factors adversely affecting our orchards.
- Results for the second quarter were impacted in a few of our growth areas by the highly publicized heavy rains in California delaying a portion of the lemon harvest into the third quarter.
- Softer pricing for lemons and avocados as markets continue to work through surplus inventory.