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Alico Inc (ALCO) Reports Mixed Fiscal Year 2023 Results Amidst Hurricane Recovery Efforts

  • Alico Inc (NASDAQ:ALCO) announces a net income of $1.8 million for FY 2023, a significant decrease from the previous year's $12.5 million.

  • Adjusted net loss for the year stands at $(24.5) million, with Adjusted EBITDA at $(16.1) million.

  • The company sold approximately 2,255 acres for $12.0 million and maintains a healthy working capital ratio of 3.90 to 1.00.

  • Alico Inc (NASDAQ:ALCO) maintains a solid debt ratio of 0.30 to 1.00 and has $70.0 million of undrawn credit available.

On December 6, 2023, Alico Inc (NASDAQ:ALCO) released its 8-K filing, disclosing the financial outcomes for the fourth quarter and the fiscal year ended September 30, 2023. The company faced significant challenges due to the impact of Hurricane Ian, which resulted in a substantial decrease in net income compared to the previous fiscal year. Despite these challenges, Alico Inc (NASDAQ:ALCO) has maintained a strong balance sheet and liquidity position.

Financial Performance Overview

Alico Inc (NASDAQ:ALCO) reported a net income attributable to common stockholders of $1.8 million for the fiscal year 2023, a sharp decline from $12.5 million in the previous year. This decrease is primarily due to increased costs in fertilizer, herbicide, labor, and fuel, coupled with lower box production for both the Early and Mid-Season and the Valencia harvest. The company's earnings per diluted common share also fell to $0.24 from $1.65 in the previous fiscal year.

When adjusted for certain non-recurring items, the company reported an adjusted net loss of $(24.5) million, or $(3.23) per diluted common share, compared to an adjusted net income of $(0.21) per diluted common share for the fiscal year 2022. Adjusted EBITDA also reflected a negative turn, settling at $(16.1) million for 2023, a stark contrast to the $13.4 million reported in the previous year.

Operational Highlights and Citrus Division Results

The company's citrus production experienced a significant decrease, with total boxes harvested falling by 51.5% from the previous year. Despite this, Alico Citrus managed to achieve a slightly higher average realized price per pound solids, rising from $2.63 to $2.70. The company anticipates stable or slightly increased market prices for the upcoming 2023-2024 harvest season.

Land Management and Other Operations

Income from operations in the Land Management and Other Operations Division decreased by $0.5 million due to a reduction in leased acreage related to grazing and hunting leases, as a result of land sales.

Management Commentary

During 2023, Alico was recovering from the aftermath of Hurricane Ian that occurred in September 2022, which damaged half of our crops intended for the 2023 harvest season, and our financial results were disappointing as we expected. The approximately $28.2 million of insurance proceeds that we received during the fiscal year were used to help maintain our grove caretaking programs for our approximately 49,000 citrus acres located across 7 counties in Florida so that Alico will be ready to harvest a healthy citrus crop in 2023-24.

Balance Sheet and Liquidity

Alico Inc (NASDAQ:ALCO) continues to exhibit financial resilience with a working capital of $43.7 million and a working capital ratio of 3.90 to 1.00. The company's debt ratio remains solid at 0.30 to 1.00, and it has substantial available borrowings under its lines of credit, amounting to $70.0 million as of September 30, 2023.

Looking Forward

Despite the setbacks from Hurricane Ian, Alico Inc (NASDAQ:ALCO) is optimistic about the recovery of its citrus crop in the 2023-24 season. The company is also in the process of selling additional acreage and is exploring the highest and best use of its real estate assets to enhance shareholder value.

For a detailed breakdown of Alico Inc (NASDAQ:ALCO)'s financial statements and further insights into the company's performance, please refer to the full 8-K filing.

Explore the complete 8-K earnings release (here) from Alico Inc for further details.

This article first appeared on GuruFocus.