Costa says citrus earnings to be lower than expected
Shares in Australia’s largest fruit and vegetable wholesaler are down sharply with its full year citrus earnings to come in lower than expected due to weather conditions and higher costs.
Costa, Australia’s biggest fruit and vegetable wholesaler, says earnings from its citrus production will be lower than previously forecast due to weather and rising costs.
Shares in Costa, which announced the unexpected exit of chief executive Sean Hallahan last month, slumped more than 13 per cent on Monday to close 31c lower at $2. Shares in the group, which listed in 2015, have fallen 41 per cent in six months.
“Adverse weather conditions, including both higher rainfall and cooler temperatures, have persisted” for its citrus crop, the group told investors on Monday.
Costa said its Queensland crop had been packed, while southern crops in the Riverland and Sunraysia were almost 80 per cent harvested, with late navels and mandarins still to be packed.
“Despite harvest volumes being in line with budget, the previously reported lower quality levels across all citrus regions have continued, which has resulted in considerably lower packouts as well as reduced volumes of first-grade fruit for export,” the company said.
“The effort to produce the crop in challenging conditions has also caused an increase in labour expenditure as well as higher spraying costs in relation to pest and disease control.”
Like many operators in the sector, Costa has struggled during two years of border closures, which prevented backpackers from picking fruit, exacerbating a tight labour market.
In August, Costa booked a net profit after tax of $37.8m for the six months to July 3.
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