U.S.: Limoneira forecasts operating income to rise by at least a third in 2018

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U.S.: Limoneira forecasts operating income to rise by at least a third in 2018

The California-based company also expects EBITDA will go up by at least a fifth, and that's not including potential benefits from the Tax Cut and Jobs Act.

California-based global agribusiness Limoneira has forecast a sharp rise in operating income for the current fiscal year, while 2017 revenue ended up marginally higher than anticipated in the company's previous guidance

In its results for 2017 (ending Oct. 31) announced today, the group highlighted revenue hit US$121.3 million, representing 8% growth year-on-year. EBITDA however was slightly by 5% at US$19 million.

"In fiscal 2017 we achieved operational accomplishments that resulted in record revenue and operating income despite encountering weather-related delays of our desert lemon harvest," said chief executive officer Harold Edwards.

"We are in a great position to continue leveraging our efficient operations through additional third party growers’ fruit and the Suntreat relationship that advances our competitiveness in the orange and specialty citrus category," he said.

For the current 2018 fiscal year the company expects to sell between 3.1 million and 3.3 million cartons of fresh lemons at an average price of approximately US$24.50 per carton, and expects to sell approximately 6.0 to 6.5 million pounds of avocados at approximately US$1.30 per pound.

Operating income forecasts have been slated in the area of US$15.7-17.8 million, while EBITDA is expected to be between US$23-25 million. 

The group is also upbeat about the Tax Cut and Jobs Act  which was signed into law on Dec. 22, 2017, but potential impacts from the new legislation are not included in today's guidance.

"Some of the provisions of the new tax law affecting corporations include, but are not limited to a reduction of the federal corporate income tax rate from 35% to 21%, limiting the interest expense deduction, expensing of cost of acquired qualified property and elimination of the domestic production activities deduction," the company said.

"The Company is currently evaluating the impact the new tax law will have on its financial condition and results of operations."

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