Fort Myers’ Alico Inc. has $20 million in land sales pending

Just five weeks after announcing it was getting out of the citrus business, Alico Inc. is on the verge of closing $20 million worth of land sales.

John Kiernan, the Fort Myers company’s president and CEO, told investors of the potential deals in an earnings statement last week.

In the statement Kiernan says that getting out of the “capital-intensive citrus production” has strengthened its financial position and that is “in the process of advancing several land sales currently in negotiations which are expected to generate approximately $20 million in proceeds this fiscal year.”

The funds from the sales and cash generated from its final harvest are expected to fund the company through fiscal 2027, he says, adding that Alico also has $73.5 million in unused credit facilities available if the need arises.

“This transformation (away from citrus) enables us to pursue commercial and residential development opportunities while maintaining diversified farming operations across our portfolio, positioning us to deliver enhanced returns for shareholders,” Kiernan told investors.

Alico announced Jan. 6 it was shutting down its citrus operation after more than 120 years, citing what it called changing economic and environmental realities that had led to a 73% decline in production over the past decade.

The company, at that time, said increasing financial challenges from citrus greening disease and environmental causes, including hurricanes, the past several years led to the decision to not spend further capital on its citrus operations after the current crop is harvested.

Alico, once one of the country’s largest citrus producers, instead “will focus its resources on creating new opportunities for profitable growth.”

Kiernan reiterated those concerns in the Feb. 12 earnings statement, telling investors that “operational results reflected the ongoing challenges in our citrus division, with lower levels year-over-year of pounds solid being produced.”

According to the earnings statement, Alico’s production in the three months ending Dec. 31 was down 13% to 4 million pounds of solid fruit harvested from 4.7 million pounds a year earlier.

The drop, according to the earnings statement, was due to effects of Hurricane Milton.

“These continued production challenges reinforced our recent strategic decision to wind down Alico’s citrus operations because they are not economically viable,” he says in the statement.

“Looking ahead to the remainder of fiscal 2025, we expect to complete our final citrus harvest while positioning the company for its next chapter.”

That next chapter includes transforming into a land company, “balancing alternative agricultural operations with strategic land monetization opportunities.”

The company says it owns approximately 53,371 acres across eight counties in the state, as well as approximately 48,700 acres of oil, gas and mineral rights.

Kiernan, on a conference call with investors after the earnings statement was released, says 75% of its current acreage can remain “agriculturally related” and that about 25% can be “transitioned and entitled for non-agricultural purposes.”

“We expect to maintain our commitment to the Florida agricultural industry to diversified profitable non-citrus operations following this wind down and also expect to entitle certain parcels of our land for commercial and residential development,” he says.

What Kiernan did not say was how many acres were in the $20 million of pending sales. He did tell investors on the call, however, that the dollar amount was based on “transactions that are under option agreements or have been negotiated and are expected to close soon.”

Alico Inc. posted $16.89 million in revenue for the fourth quarter, up 24.2% from the same period last year.