Tejon Ranch Co. posted higher profits for the three and six months ending June 30 compared to the year-ago periods, driven in part by higher almond prices and the return of the company’s hunting program, which had been suspended in 2012.
The owner of vast swaths of farmland stretching from just north of Gorman (where it plans to build homes) to Kern County (where it has developed commercial centers), Tejon derives profits today from diversified sources ranging from agriculture to oil to real estate.
Despite slightly lower revenues, the company posted second-quarter profits of $2.084 million (10 cents per share), versus $118,000 (less than 1 cent) a year earlier. For the six-month period, 2013 profits were $2.7 million (13 cents) versus $393,000 (roughly 2 cents) for the same period in 2012.
Having survived a court challenge in 2012, Tejon Mountain Village will feature 3,450 homes north of Gorman. | Click map to enlarge
The biggest differences, the company said, were “higher farming net operating profits, an increase in equity in earnings from our joint ventures, and a decline in stock compensation expense.” Those were partially offset by higher tax payments and lower profits from petroleum operations due largely to oil well maintenance and somewhat lower gas prices.
Farming revenue grew by $849,000 due to higher per-pound prices for the company’s almond crop.
Tejon received $459,000 more in rent so far this year in the form of rent from the energy company Calpine, due to increases in power prices.
Hunting and grazing revenues increase by a little over $1 million compared to the first six months of 2012, when the company’s hunting program was shut down.
Tejon describes its hunting program as follows:
Source: TRC website
“The vast lands of Tejon Ranch support a variety of wildlife, including deer, elk, antelope, wild pigs, wild turkey, black bear, bobcats, coyotes, squirrels, pigeons, doves and quail. Wildlife management plays an important role in maintaining the proper balance between the many species that inhabit the Ranch.
“The Ranch works closely with California’s Department of Fish and Game to enhance the balance between wildlife populations through a carefully managed hunting program. As part of its Private Lands Wildlife Management License, the Ranch sets the hunting seasons, the harvest limits, ages of animals to be harvested, and the number of hunting licenses issued. All these factors are designed to maintain a healthy and balanced wildlife population so that one species does not negatively impact the welfare of another.
“Tejon’s programs are considered among the best in the nation. The California Department of Fish and Game has recognized the Ranch for its “outstanding contributions to the promotion of California’s rich hunting heritage.” Hunting opportunities are offered under safe and controlled access and include big game guided hunts, group hunts, and corporate and seasonal memberships.”
In the minus column, mineral resource revenues were down by $2.154 million for the first six months of 2013 because 20 percent of the company’s wells and storage facilities were down for maintenance and expansion, and because of a 6-percent decline in oil prices compared to last year.
Operating expenses were $2.34 million lower, “largely due to the reversal of previously recorded stock compensation expense related to unvested awards of (former CEO Robert A. Stine, whose retirement was announced in May), and to awards that will not vest related to the retirement of the company’s CEO at the beginning of 2014.”
Earnings from joint ventures increased by $1.145 million during the first six months of 2013, largely due to improved operating margins and better gasoline sales at the company’s TA/Petro joint venture.