Royal Hawaiian Orchards Posts Yearly Loss
A poor crop, sales reduction, and the costs of rolling out new products led to a $3.7 million net loss for Royal Hawaiian Orchards (OTCQX:NNUTU) in 2013, the company reported.
The loss that occurred on reduced revenue in 2013 extended losses suffered in 2012.
The company reported a net loss of $499,000 on $20.1 million in revenue at the end of 2012. At the end of 2013, Royal Hawaii Orchards’ revenue for the year was $13.9 million with a reported loss of $3.7 million.
A statement from the company said its 2013 macadamia nut crop was down 21% following the second-lowest harvest in 20 years, which affected production of the company’s line of branded products launched in 2012.
Drought conditions in Ka`u, the impact of the macadamia felted coccid, an insect pest, and an accelerated fall harvest also contributed to lower production, resulting in a higher price for the nuts, up from 53 cents in 20012 to 61 cents per pound (wet-in-shell) in 2013.
The company’s macadamia nut sales dropped from $18 million in 2012 to $9.9 million in 2013, attributed to the lower production and “the effect of holding inventory and … retaining 6.1 million WIS pounds for the expansion of its expansion of its macadamia snack products,” the statement said.
“The inventory will not generate revenue until the branded products are sold,” it said, an estimated three to nine months after the company typically sold the WIS nuts for revenue in past years.
“The Partnership believes that the benefits it will enjoy from its branded business will more than offset these short-term costs,” the company said in the statement.
Sales of branded products increased to $2.1 million in 2013, up from $91,000 in 2012.