Costa Group’s 1HCY20 results reveal a revenue growth of 6.8 per cent from 1HCY19 to $612.4 million despite a mixed performance in its produce sector, which was impacted by factors including drought, bushfires and COVID-19 challenges.
Costa Group 1HCY20 Snapshot
- Revenue: $612.5 million, up 6.8 per cent from 1HCY19
- EBITDA-SL: $93.7 million, up 13.7 per cent from 1HCY19
- NPAT-SL: $45.8 million, up 12 per cent from 1HCY19
- Deb debt: $181.7 million, leverage of 1.66x, ahead of plan
The company said the financial impact from drought was estimated at around $15 million EBITDA-SL in Tomato and Berry categories, however, crops recovered to full yield by May. Its new Corindi, NSW, raspberry crops have come on stream from mid-August and its blackberry crop expected from mid-October.
Costa’s citrus volume was lower than usual due to a later start to the season and impacts of hail, but strong export and domestic demand with price appreciation has improved on the previous year.
“We have been impressed with the relative performance of our citrus orchards in terms of fruit size and yield, especially given the circumstances where industry harvest volumes have been impacted due to previous heat events,” said Costa Group CEO Harry Debney.
“The continued impact of CY19 adverse weather and drought conditions affected our first half CY20 results for our Australian operations. However, these historical conditions should have no material impact in 2HCY20 or beyond and there is broad based momentum in demand and pricing over our Australian portfolio leading into the second half of CY20.”
Around $5 million in earnings have been impacted for Costa’s Morocco business due to COVID-19 related disruption, but operations in most regions have continued “without material interruptions and no direct impact on yield and supply”.
Costa Group plans to extend its Australian and international initiatives, including the construction of a new 10-hectare glasshouse and nursery at Gurya, NSW, and expansion of its Monarto mushroom facility, which is now operating at full capacity.
Meanwhile in Morocco, an additional 23 hectares have been planted in Agadir, and in China, a 62-hectare farm in Guangmen is expected to complete on time, with plantings aiming to support the company’s goal of “achieving maximum full year yield realisation in CY21”.
Costa Group was #47 in the Food & Drink Business Australia's Top 100 Food & Drink Companies 2019 report.
