The share price of Costa Group reached a three year low of A$2.38 (US$1.63) on the morning of 30 October, the first day the company had resumed trading since it downgraded its earnings guidance for the third time in 2019.
By 3pm the price had recovered to A$2.68 (US$1.84). This represented a 22.5 per cent drop since the company’s previous close price of A$3.46 (US$2.37) on 21 October. The company had entered a trading halt on that date in anticipation of its earnings update.
Along with announcing downgraded earnings guidance, Costa Group also said it would undertake an underwritten A$176m (US$120m) equity raising to strengthen its balance sheet.
The leading grower-packer-marketer has attributed its struggles to issues across nearly all of its categories, highlighting the effects of drought in particular.
“Previously foreshadowed challenges facing the company have continued to crystallise. In addition, prolonged extreme dry and hot conditions are now impacting fruit sizing and yield in avocados, blueberries and the late season citrus crop,” the company said.