Horticultural company Costa Group’s shares have fallen by nearly a quarter due to multiple problems with its raspberries and mushrooms.
Costa Group chairman Neil Chatfield told shareholders at the annual meeting on Thursday that it is undergoing “an unprecedented level of volatility across virtually all of our categories and seen our earnings negatively impacted”.
Its Driscoll’s raspberries is under a “crumbly fruit” condition, wherein the fruit falls apart and affects the harvest output, chief executive Harry Debney said at the meeting.
The warm weather in May also affected its low demand for mushrooms in Australia. Moreover, Costa is dealing with a fruit fly problem at its farm in Stuart’s Point, NSW.
“We are in discussion with the relevant state and national agencies, but it appears that approximately 17,000 tonnes of Costa’s citrus crop may not be packed in our Riverland sheds and in that event would need to be sent to third-party packers in Sunraysia and also cold treated to meet export protocols,” Costa chief executive Harry Debney told shareholders.
Costa’s tomatoes in Guyra, NSW, is dealing with water problems and it is unknown about water allocations to its seven citrus orchards from July. Debney still remains positive for the citrus season despite the multiple problems his company is facing.
The company said it is targeting to receive A$140 million to A$153 million in revenue and at least earn A$57 million to A$66 million in profit this year, ending in June 30. At 1335 AEST Costa shares were down A$1.27, or 24.52 per cent, to A$3.91 – their lowest level in more than two years, according to AAP.
“No one said it was easy to run an agricultural company,” he told shareholders.
Chatfield also said he was frustrated with how slow the movement is in exporting Australia’s “world leading” blueberries and urged Government officials to do more to improve the situation.
“It is important that the federal government take a whole of government approach when negotiating such trade access, and that the necessary technical and trade negotiation experts are all involved,” he said in a statement.
Costa sells fresh produce in Australia including citrus, tomatoes, mushrooms and avocados. It is a major exporter and also has overseas operations.
