By - Bhawna Gupta
- Costa Group’s shares were trading at AU$2.02 apiece, down 12.77% on ASX at 3.12 PM AEDT.
- Costa released an update on its earnings guidance earlier in the day.
- This underperforms ASX 200 index, which was down 1.45% at 6,660.90 points at 3.15 PM AEDT.
Shares of Costa Group Holdings Limited (ASX:CGC) were trading in the red on Monday following company’s update on its earnings guidance. At 3.12 PM AEDT, the food and beverages company's shares were trading at AU$2.02 each, down 12.77% on ASX. This underperforms ASX 200 index, which was down 1.45% at 6,660.90 points at 3.15 PM AEDT. On a sectoral front, all 11 sectors were trading lower at 3.13 PM AEDT.
Costa Group provided a trading update earlier in the day. Costa said that it expected its full year earnings for the Citrus category to be considerably lower than previously forecast.
The company also informed that unfavourable meteorological conditions have continued including increased rainfall and lower temperatures. The previously reported poorer quality levels across all Citrus regions have persisted despite harvest numbers being in line with budget, Costa Group added. It has led to significantly lower packouts as well as decreased volumes of first-grade fruit for export.
The rest of the portfolio continues to perform as predicted, with Berries, Tomatoes, and Mushrooms performing at projected levels. The Avocado category has benefited from better pricing in the second half, which should result in a minor increase from prior levels, the ASX release said.
The company said that the market demand and price remain healthy in the countries to which it sells, which bodes well for the 2023 season. The struggle to grow the crop under difficult circumstances has also led to a rise in labour expenditures and greater spraying costs for pest and disease control.
The group's EBITDA-S for the entire year was currently projected to be somewhat higher than the figures from the previous year. While the company doesn’t anticipate any further major effects from the recent heavy rains, the additional downside risk is likely if the current unfavourable weather persists.