Costa notes that its operations performed well in 1HCY2022 and those preliminary results are expected to be in line with the company’s expectations. Both the domestic and foreign produce categories are anticipated to end the first half of the year ahead of the similar first half of the previous year (1HCY2021). Strong demand and pricing have been observed across the portfolio during the citrus season. Fruit is still successfully exported to China and other important Asian markets, and shipping services have improved compared to last year, though transit times and service performance are still below pre-pandemic levels.
Although volumes are higher than expected, the 2PH business is largely performing in accordance with pre-acquisition expectations. However, certain quality problems have been encountered because of recent weather occurrences. A lesser percentage of first-grade product is being produced now than it was at this point in the harvest last year due to the impacted types. The majority of 2PH earnings are made in the second half of the year, even though the 2PH harvest season is currently about halfway through. This is because the first four months of the year are a non-sale time. As of the beginning of July, the Riverland and Sunraysia crops were about one-third of the way through the growing season, and demand for all kinds remained high despite higher prices than in the previous year.
As the season has progressed, it has been clear that weather-related occurrences have also contributed to some quality problems, particularly with navels, which are more noticeable in Sunraysia than the Riverland. As compared to the previous year, this has affected pack out rates. The earnings from the Riverland and Sunraysia activities are primarily recognised in the second half of the year, similar to 2PH. It won’t be possible to fully assess how these quality problems across the citrus portfolio will affect second-half profitability until the citrus season has proceeded. Because the season is farther along, a more thorough update will be given at the investor briefing that follows the announcement of the 1HCY2022 results on August 26, 2022.
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