Australia’s largest fruit and vegetable producer recorded sales growth and profit reduction in what it called a “particularly challenging” year.
Revenue was $1048m, up 5.8 per cent on CY18, led by new Colignan citrus farm sales and increased table grape marketing volume. Its earnings before interest, taxes, depreciation and amortisation (EBITDA) before self-generating and regenerating assets (SGARA), leasing and material items (EBITDA-SL) dropped 21.5 percent to $98.3 million on CY18.
CEO Harry Debney said the company had faced significant challenges in CY19 due to drought and weather events in 2H19.
Debney said: “The second half of the year was particularly challenging, which impacted fruit sizing and yield in our late season citrus, berry and avocado crops. We also had to take action to remove part of our berry crop at Corindi (New South Wales) due to a lack of rain in order to conserve our perennial blueberry footprint.
“Although our key berry and tomato growing locations at Corindi and Guyra have received heavy rainfall over January and into February, improving our overall and ongoing water security across the business will continue to be a key priority in recognition of the risks associated with weather and climate cycles.
The company is committed to making our operations sustainable so they can both better withstand environmental risk including unforeseen and extreme weather events and maximise opportunities with respect to improving our economic efficiency and profitability over the medium to long term.”
Debney said early season performance from the international markets has been positive, with the impact from last year’s citrus hailstorm expected to be at the higher end of previous estimates. Early season yield estimates suggest a lighter crop, due to both density and sizing, however rainfall and moderating climate over the next few months may improve the situation.
The impact from COVID-19 is currently unknown, with peak volumes in China to be harvested from March, he said.
Costa Group was #47 in the Food & Drink Business Australia's Top 100 Food & Drink Companies 2019 report.
