Tomato

Costa announces half-yearly results

Firm reports lower profit number than expected but remains on target for medium to long term growth

Following reports of lower than expected sales ahead of Christmas, Costa Group has announced detail of its performance in the six months to 30 December 2018.

Costa CEO, Harry Debney said the results were anticipated to be considerably lower because of the muted trading performance during December.

“The six-month financial period to December has delivered a lower profit number than expected. There were several contributing factors to this, some of which had been accounted for including bringing African Blue on to our balance sheet as a result of majority ownership, additional preharvest farming cost investment through our increased international footprint and an ‘off’ citrus season in terms of the biennial nature of the crop,” said Debney.

The company said it remains on track to meet medium to long term profit growth objectives, which incorporate its five core product categories as well as international development.

Revenue decreased in the produce segment by 4.3 per cent compared with the six months prior, and total transacted sales were at A$615.7m compared with A$620.3m in the first half of 2018.

Citrus

The biennial nature of citrus is said to have caused the 4.3 per cent dip in revenue for Costa’s produce department. Lower quality toward the tail end of the season was also to blame.

“Exports for the 2018 calendar season comprised 73 per cent of packed volume, with Japan being the largest market taking 40 per cent of total exports, followed by the US, New Zealand and China,” said Debney. “Exposure to the Korean market is expected to increase in 2019 as tariffs are further reduced under the Australia – Korea Free Trade Agreement.”

Avocados

Costa’s avocados also journeyed to Asia this year for the first season. The company said 60,000 trays of exports were initiated to markets in South East Asia, including Hong Kong, Singapore and Malaysia.

Domestic crop was mainly sourced from northern New South Wales, with some residual volume coming from Queensland. Central Queensland’s overlap with the end of Western Australia’s season resulted in a supply glut that lowered prices.

Berries

Strong production volumes for blueberries were also apparent at Costa’s Corindi farm in New South Wales but were offset by lower volumes from Queensland.

A new Arana premium variety attracted a 23 per cent premium on 200g packs at retail level and a double-digit premium at wholesale.

The company said raspberry contribution was disappointing.

Internationally, earnings from Costa’s Morocco, China and Americas-based operations are weighted to the first half of 2018, the company said.

Pre-harvest investment in Morocco and China through July-December decreased earnings which occur during the harvest period in the first half of the year.

“There has been a good early start to the blueberry harvest at the main Manlai farm with positive market reception reflected in premium pricing received for our large ‘jumbo’ berries,” said Debney.

The company said Driscoll’s US-based royalties produced continued revenue growth.

Tomato

Tomatoes also experienced an undesirable result with an excellent production of snacking varieties being met by weaker retail performance, resulting in more sales across the wholesale channel lowering price realisation. Truss production and pricing was also lower.

Costa will be showcasing a new truss variety in 2019 called Endeavour, which it said features enhanced yield, shelf life and disease resistance.

Mushroom

Mushrooms bucked the fluctuation trend and met financial targets for the period.

The recent higher cost of straw is expected to manifest over 2019 as Costa replenishes inventory stock. A new compost facility is also expected to have a positive impact and will operate from the fourth quarter of 2019.

Source: http://www.fruitnet.com/asiafruit

Author: Camellia Aebischer

Costa boosts first-half profits

“Standout” performance for citrus and tomatoes helps drive 14.5 per cent increase Australian group’s first-half profits
Leading Australian grower-packer-marketer Costa Group has announced a 14.5 per cent increase in first-half net profit to A$28.6m.

The result came on the back of a near 10 per cent increase in revenue in the six months to 31 December, to some A$489.4m.

Chief executive Harry Debney singled out citrus and tomatoes as the star performers among its core categories.

“These results are indicative of a strong 1H FY2018, with our citrus category continuing to make a standout contribution, fuelled by growing export demand across our key markets including Japan, the US and China,” Debney said.

“Tomatoes also made an excellent contribution boosted by the snacking segment’s performance.”

In the H1 results announcement, Costa also reported on a number of key investments to drive its further growth.

The group expanded its shareholding in Morocco-based berry venture African Blue in November, boosting its ownership to 86 per cent, from 49 per cent, in a deal worth A$68.5m.

Avocado acquisitions

Besides berries, avocado expansion is also on the cards, with Costa today announcing a conditional agreement to buy Coastal Avocados in the mid-north coast of New South Wales, a new growing region for the company. Coastal currently produces around 200,000 trays of avocados per year, a figure expanded to grow to 300,000 trays as plantings mature. It also packs a further 300,000 trays for third-party growers.

Costa announced two further avocado acquisitions were completed as of January, including the Gunalda avocado farm in Central Queensland and Burness avocado farm in Far North Queensland.

“As a result of these acquisitions, Costa will, on completion of the Coastal Avocados acquisition, have a production and supply footprint stretching from February through to December,” said Debney. “We are now well under way to executing our strategy to build avocados into our fifth core vertically integrated produce pillar and to ultimately achieve 52-week supply.”

The new avocado acquisitions, together with recent additional plantings, are set to take the company’s total plantings to around 679ha with a presence in four growing areas across three states and packhouse facilities in each region. They bring Costa’s investment in the avocado category, in conjunction with Macquirie Agricultural Funds Management, to A$110m, as the group bids to become “the market leader” in the next three years.

Acquisition activity in Australia was not limited to the avocado categrory, with Costa also completing the purchase of citrus operation Impi Orchards in December. The operation includes 77ha of citrus plantings, with a further 65ha of development land, producing a mix of oranges, mandarins, grapefruit and lemons.

“This now brings Costa’s total citrus plantings to around 2,240ha, which are all located in the Riverland region,” said Debney, who confirmed that Costa “maintained an active interest in M&A opportunities in the citrus industry”.

Elsewhere, Costa reported on the ongoing successful execution of its domestic berry growth programme in Australia, where it has added 95ha of new plantings in 2018.

The group also said its investments in berry operations in China remained on track, despite a challenging summer with wet weather hampering production. The company is planning a 65ha expansion at its new Manhong site for 2019.

Positive outlook

Costa said it now expects full-year net profit to grow by around 25 per cent, up from previous guidance of at least 20 per cent.

Full-year earnings would be more heavily weighted to the second half of the fiscal year, the company said, due to the timing of the avocado harvest and further growth of international operations, including the consolidation of African Blue in December 2017.

The earnings forecast includes a contribution from Costa’s acquisition of African Blue. Costa’s purchase of a further 37 per cent shareholding of the company prompted a revaluation of the 49 per cent stake it already held. A $40.1m non-cash gain on the revaluation increased Costa’s statutory net profit for H1 to A$66.2m.

The company raised its interim dividend of 5 cents per share, fully franked, up 25 per cent on FY17.

Source: http://www.fruitnet.com/asiafruit

Author: John Hey

Irradiation facility enables NZ to import AU winter tomatoes

The Bowen region is Australia’s largest winter producer of vegetables. Tomatoes are by far its biggest crop, totalling US $120 million a year. Yet, even though it could offer consumers access to fresh tomatoes in the winter, its export market has been extremely limited.

The problem is the Queensland fruit fly, an aggressive pest that Australia once controlled with pesticides that are no longer allowed. However, thanks to a protocol in place that links Australia to New Zealand, tomato exporters have another option: irradiation.

Australia irradiates the tomatoes to ensure there are no pests and New Zealand accepts irradiation as proof of insect control. The Joint FAO/IAEA Division has worked with Australia and other countries to bring irradiation to the fore as a suitable replacement for chemical treatments.

The timing is perfect. As Australia’s tomatoes are ripening, New Zealand’s tomatoes are going out of season. And because the two countries have agreed that irradiation is a safe and appropriate way to meet insect pest control requirements, New Zealand can import irradiated winter tomatoes and a host of other fresh produce from Australia’s orchards and fields.

source: iaea.org via www.freshsource.com 

Publication date: 6/30/2017

Australian Costa Group: +26% profit

The long, cold spring in Morocco and the disappointing soft fruit harvest in Tasmania and Atherton Tableland weren't enough to depress the results of the Costa Group. The Australian multinational noted a net profit which was 26.3% higher than last year.


The turnover over the financial year rose by 10.2% and reached 1 billion Australian dollars. The remaining profit was 76.7 million Australian dollars. The company is active in various segments and has cultivation locations in Australia, Morocco and China.

Morocco had a long and cold spring this year, which meant the season started eight weeks late. The harvest concentrated towards the end of the season. As a result of this, the contribution of African Blue, part of the Costa Group, was below expectations.

The soft fruit harvest in both Tasmania and Atherton Tableland was disappointing, which limited the advantages of the off season prices. Within the soft fruit category the company is expanding with cultivations in Morocco, China and Australia. The citrus on the other hand presented well, with an excellent start to 2018. Of the 300 hectares in Riverland, 201 hectares were planted in June, of which 157 hectares citrus and 44 hectares avocado.

Tomatoes and mushrooms performed well with results above expectations.
There was an investment in Monarta farm, a cultivation company of mushrooms, among others. This expansion is on schedule. An investment in 10 hectares of greenhouses for snacking tomatoes has been announced for tomatoes. The greenhouse is to come into production from May 2020. Besides this there was investment in the nursery capacity and the packaging facilities within the group.

Costa Group is investing in the avocado cultivation as a fifth pillar of the company. In the last 18 months 6 companies were taken over, including Koci Farm (FNQ).

 

Publication date: 8/29/2018

Source: www.freshplaza.com