Costa Group earnings lifted by global premium berry growth

Global premium berry growth lifts Costa Group earnings

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Global premium berry growth lifts Costa Group earnings

Australia's largest vertically integrated fresh produce company Costa Group has reported a 16 percent rise in underlying profit in 2021, buoyed by blueberry projects abroad with its proprietary varieties delivering price premiums in international markets, Business News Australia reports.

Costa's chief financial officer Wayne Johnston told an investor call this morning the majority of the $60 million in additional revenue for the year came from the international segment with more than a quarter of sales now generated by customers outside Australia.

Revenue grew almost by half in China as Costa's joint venture berry project with Driscoll's notched a 40 percent uptick in volume, with the jumbo-sized Arana variety receiving a 30 percent price premium in China, compared to a 20 percent premium in Australia.

More Chinese blueberry growth looks likely as CEO Sean Hallahan noted planting was completed in October for a 50-hectare development in Baoshan, Yunnan, followed by the completion of the 100-hectare Baoshan Agripark project recently in mid-February.

"Over the past year total planted China hectares increased by 150 hectares to a total of 396 hectares," Hallahan was quoted as saying.

"Costa has consistently shown our ability to plan and execute our growth objectives on time and on budget in the Chinese market, creating an outstanding platform for future growth."

Costa's Moroccan joint venture African Blue has also performed strongly with 24.1 percent revenue growth, but the company's revenue from that business accounted for 59 percent of Costa Group's A$177.7 million (US$129 million) in international segment sales.

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