Costa Group Holdings Limited, the Australian grower, packer and marketer of fresh fruit and vegetables today announced its financial results for the half year ended 2 July 2023.
Key Headlines
- International segment delivered +32.8% revenue growth vs pcp, with both China and Morocco contributing to an impressive performance. International segment EBITDA-S was +43.5% versus pcp.
- Together with a mixed domestic produce segment performance, Group EBITDA-S was $150.2m, +7.2% versus pcp and NPAT-S of $37.8m,
- As noted at AGM, citrus season was circa three weeks behind starting, meaning virtually all the citrus harvest earnings will fall in 2HCY23.
- Despite early 2PH citrus season fruit being well received in export markets, there has been a disappointing deterioration in outlook for later season fruit quality contributed to by CY22 weather impacts. Together with southern region volume downgrade and La Nina overhang contributing to fruit size being below expectations, full year EBITDA-S impact is currently estimated at $30m.
- Industry wide table grape harvest was circa 40% lower vs pcp due to CY22 weather, with EBITDA-S impact of $9m in the 1H.
- Monarto mushroom facility continues to consistently exceed production capacity, averaging 259 tonnes per week over the 1H, +3.3% increase vs pcp. Weather impact on compost affected Mernda facility yields, contributing to flat category revenue growth vs pcp.
- Higher industry wide volumes in Q1 during Tasmanian berry season had an impact on performance. FNQ season saw favourable yield and pricing.
- Tomato sales volume was positive to forecast, however lower than expected summer months pricing and demand meant overall aggregate pricing was subdued for the 1H.
- Avocado saw a recovery from prior year, with pricing at improved levels vs pcp for most of the 1H.
Financial Headlines
- Revenue of $770.7m +8.7% vs pcp.
- NPAT-S $37.8m -6.2% vs pcp
- EBITDA – $150.2m - +7.2% vs pcp.
- Statutory NPAT $31.7m
- Net debt: $350.1m, leverage of 2.31 at end Jun ’23.
Update on Paine Schwartz Partners non-binding indicative proposal
As per announcement to ASX on 24 August 20232 , discussions with Paine Schwartz Partners (PSP) are continuing and PSP were advised of the latest trading conditions as part of the ongoing due diligence process. It remains uncertain if a transaction with PSP will eventuate and at what price. Costa expects to be able to provide an update in relation to the transaction in mid/late September.
Outlook 2HCY23
As noted, a deterioration in late season 2PH fruit quality and southern region volume and fruit size downgrades are currently estimated to have a circa $30m impact on full year EBITDA-S. The contributing factors are considered non-structural with the ongoing health and productive capacity of the trees unaffected.
Click here to view the 1HCY23 Results presentation.
For more information:
Costa Group Holdings Limited
Level 5, 818 Bourke St, Docklands
Vic 3008; Locked Bag 38004
Tel.: +613 8363 9000
www.costagroup.com.au