International success boosts Costa
Revenue from international segment grows 30 per cent for leading Australian fresh produce company
Costa Group has announced its financial results for the full year ending 26 December 2021 (CY21), reporting a 10 per cent year-on-year increase in earnings, driven by international sales.
Costa recorded earnings before interest, taxes, depreciation, and amortisation (EBITDA) of A$218.2m in CY21, a 10.6 per cent increase on CY20. Its net operating profit after tax (NPAT) rose 16.2 per cent year-on-year to A$64m and its international revenue increased 30 per cent compared to CY20.
Chief executive, Sean Hallahan, said it was a record year for Costa’s international segment, which supported the company’s investment strategy of expanding its production and supply footprint utilising its blueberry genetics.
“The current and projected growth of the middle class in China, the per capita growth in European berry consumption and the opportunities presented by emerging regions, such as India, means Costa is well positioned to benefit as we further invest in growing our international operations,” said Hallahan.
“The acquisition of quality citrus assets over the year, including 2PH Farms, was transformative for our business, highlighted by the successful integration of these assets, and the opening up of further export market opportunities in which to sell our premium citrus offerings.
“There was strong second half momentum across our domestic produce portfolio, with the only downside being the performance of the avocado category. Sales and earnings in our berry category improved significantly over the prior year and mushroom and tomato volumes were up over the second half, benefiting from solid demand and pricing.”
Looking forward Hallahan said the group’s international segment continued to show promise and some of its other investments were expected to pay dividends through 2022.
“Early season China yields and demand have been above expectation, with our Moroccan berry harvest building against a strong demand backdrop. Our domestic segment has had a positive start to the year, with strong berry volumes and favourable pricing, tomato volumes are ahead of CY20, mushroom production volumes are significantly improved versus CY20, and the citrus category will benefit from a full year contribution from 2PH,” said Hallahan.
“The significant earnings growth drivers to deliver increased return on invested capital over CY22 includes the commencement of harvesting at our new 50ha berry farm in Baoshan, China; full year contributions from our 2PH citrus farms and new 10ha of tomato glasshouse; increased volumes of our premium quality blueberry varieties, Arana and Delight, and expected rebound in our Colignan, Sunraysia grape volumes.”
Author: Liam O'Callaghan