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SANTA PAULA, Calif. - Limoneira Company (NASDAQ:LMNR), a global agribusiness currently trading at $16.61 and commanding a market capitalization of $299.73 million, has announced a joint venture with Agromin Corporation, California's largest organic waste recycler. According to InvestingPro data, the company has maintained dividend payments for 18 consecutive years, demonstrating consistent shareholder returns despite market fluctuations. The partnership aims to expand an existing composting facility at Limoneira Ranch from 15 acres to 70 acres, allowing for the processing of both green and food waste.
The enhanced facility is expected to contribute approximately $5 million in EBITDA in its first year, with projections of growth to $9 million annually over the next decade - a significant increase from the company's current EBITDA of $4.52 million. Both companies will share profits equally. Limoneira plans to lease the land to the joint venture for around $0.6 million per year, bolstering its rental operations division. The company operates with moderate debt levels, maintaining a healthy debt-to-equity ratio of 0.34.
Harold Edwards, President and CEO of Limoneira, commented on the venture's alignment with sustainable agricultural practices and its benefits for stakeholders. The initiative is set to improve soil health and increase water conservation by applying compost across Limoneira's agricultural properties.
Construction of the expansion is slated to begin in fiscal year 2025 and finish in phases by 2026. A $10 million grant from California's CalRecycle Organics Grant Program, awarded in December 2024, supports the transition to a fully permitted food waste composting operation. Once operational, the facility is anticipated to process around 295,000 tons of organic waste annually.
Limoneira, with a history spanning 132 years, is a leading producer of lemons, avocados, and other crops. Agromin, headquartered in Oxnard, California, processes over 1 million tons of organic material each year into eco-friendly soil products.
This press release includes forward-looking statements, such as projected financial returns and benefits of the joint venture, which are subject to risks and uncertainties. Factors that could influence actual results include execution of business strategies, regulatory changes, weather conditions, supply chain disruptions, and market risks. The stock has experienced significant pressure, declining 37.19% over the past six months, and currently trades near its 52-week low. For detailed analysis and additional insights, investors can access the comprehensive Pro Research Report available on InvestingPro, which offers expert analysis of Limoneira's financial health, valuation metrics, and growth prospects.
The information provided is based on a press release statement from Limoneira Company.
In other recent news, Limoneira Company announced a share repurchase program authorizing up to $30 million in common stock buybacks. This decision follows the conclusion of its strategic alternatives exploration, emphasizing the company's commitment to enhancing long-term shareholder value. Limoneira also reported its first-quarter financial results, revealing a net loss of $0.18 per share, which was slightly wider than analysts' expectations of a $0.17 per share loss. Revenue for the quarter was $32.85 million, missing the $40 million consensus estimate, primarily due to lower fresh lemon prices. However, the company saw a 31% year-over-year improvement in its operating loss, reflecting successful cost reduction initiatives. Limoneira reiterated its full-year guidance for fresh lemon and avocado volumes, indicating confidence in its operational strategies. Additionally, the company made progress in monetizing its water rights, with a sale in the Santa Paula Basin generating $1.7 million. These developments highlight Limoneira's ongoing efforts to optimize its revenue mix and transition to an asset-lighter model.
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