Limoneira ends farm management deal with PGIM affiliate

Limoneira Company (NASDAQ:LMNR), a diversified agribusiness with a market capitalization of $393 million and annual revenue of $191.5 million, announced today that it has received a notice to terminate its Farm Management Agreement (FMA) with Capital Agricultural Property Services, Inc. According to InvestingPro analysis, the company currently appears overvalued based on its Fair Value assessment. The termination was initiated by PGIM Real Estate Finance, LLC on behalf of its affiliate PAI Centurion Citrus, LLC and will take effect on March 31, 2025.

The FMA, which began on January 31, 2023, involved Limoneira providing farming, management, and operations services for 3,537 acres of citrus groves in Tulare County, California. These groves were part of a property sale to PGIM in October 2022. With the agreement set to terminate without any material early termination penalties for Limoneira, the company will cease managing the Northern Properties at the end of March.

Despite the termination of the FMA, Limoneira will continue to provide packing, marketing, and selling services for lemons from the Northern Properties under a separate Grower Packing & Marketing Agreement (GPMA) with PAI. This agreement, also initiated on January 31, 2023, has a five-year term.

The termination of the FMA is not expected to have a significant financial impact on Limoneira. The company remains active in its core business areas, including agriculture production and real estate development.

This news is based on a recent SEC filing by Limoneira Company.

In other recent news, Limoneira Co . reported its fourth-quarter 2024 earnings, showing a slight miss on earnings per share (EPS) expectations. The company posted an EPS of -$0.15, falling short of the forecasted -$0.14. Despite this, Limoneira achieved record revenue of $43.9 million for the quarter, contributing to a full-year net revenue of $191.5 million, marking a 6% increase year-over-year. Adjusted EBITDA saw a significant improvement, reaching $26.7 million from a previous loss, highlighting the company’s financial progress.

Limoneira is undergoing a strategic shift towards increasing avocado production, which is expected to enhance its revenue streams. Analysts have shown interest in the company’s water rights monetization and real estate ventures, which could impact future earnings. The company has also received significant interest in its exploration of strategic alternatives, which it is evaluating with advisors. These developments indicate Limoneira’s ongoing efforts to maximize stockholder value and adapt to market demands.

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