Cobram Estate Olives (ASX: $CBO) Half-Year Report Highlights

Cobram Estate Olives Limited (ASX: $CBO) has released its half-year report for the six months ended 31 December 2023. The company reported a 59% sales growth in 1HFY24, with overall sales reaching $113.77 million, compared to $71.49 million in 1HFY23. The company's leading brand, 'Cobram Estate,' achieved a 27% growth in sales, amounting to $10.51 million. Additionally, the company reported strong operating cash flows, with cash generated from operations increasing to $32.05 million for the half-year, compared to $10.75 million in 1HFY23. The company also announced its offer to provide shareholders the opportunity to participate in its Dividend Reinvestment Plan (DRP) at the Annual General Meeting on 3 November 2023.

Executive Commentary on 1HFY24 Performance and Outlook

The company is pleased to report a significant increase in sales, particularly in the Australian and USA businesses, with a substantial uplift in packaged goods. The strong operating cash flows and EBITDA profit of $8.24 million reflect the company's improved sales product mix and increased volumes. Despite higher interest costs and tax payments, the company achieved a positive increase in cash flows. Looking ahead, the 2024 Australian harvest is expected to commence in April, and the company anticipates a decrease in the 2024 crop yield compared to 2023. However, olive oil returns remain strong, indicating a higher sales value per litre for the 2024 crop. The company's Californian olive harvest yielded a record high of 3.2 million litres of olive oil, in line with internal forecasts. The company also provided insights into its financial position, reporting a net debt ratio of 33.5% at 31 December 2023, compared to 30.1% at 30 June 2023, as it drew on its existing debt facilities to fund capital projects.

Summary of 1HFY24 Results and Future Prospects

Cobram Estate Olives (ASX: $CBO) achieved a 59% sales growth in 1HFY24, driven by strong performance in both the Australian and USA businesses, particularly in packaged goods. The company's leading brand, 'Cobram Estate,' experienced a notable 27% growth in sales. Despite a net loss before tax of $7.63 million, the company reported an EBITDA profit of $8.24 million, indicating an improved sales product mix and increased volumes. The company's capital expenditure program, focused on expanding the USA olive mill and storage capacity, is expected to contribute to future growth. The 2024 Australian harvest is anticipated to yield lower crop compared to 2023, but the company expects strong olive oil returns. The company also provided insights into its financial position, reporting a net debt ratio of 33.5% at 31 December 2023. With the announcement of the Dividend Reinvestment Plan and the positive outlook for olive oil returns, Cobram Estate Olives looks forward to navigating the challenges and opportunities in the olive oil industry.