Costa Group Holdings' share price has plummeted by more than 20 per cent after a first-half result marred by setbacks across its fruit and vegetable operations.
The grower increased its revenue by 11.8 per cent to $573 million during the period but an adverse Moroccan blueberry season, low mushroom demand, poor raspberry quality, citrus water costs and fruit fly culminated in a difficult first half.
Costa's statutory profit for the six months to June 30 edged 1.0 per cent higher to $41.1 million but profit before factoring in self-generating and live assets fell by $7.2 million, or 14 per cent, to $40.9 million.
Earnings before self-generating and live assets and leasing was 8.4 per cent lower at $82.4 million.
The company's ASX-listed shares fell by 20.6 per cent to a more than two-and-a-half year low of $3.01 at 1030 AEST, and were still 18.47 per cent lower at $3.09 by 1050 AEST.
Costa had downgraded its full-year guidance at its annual general meeting in May, forecasting FY19 profit before self-generating assets to come in between $57 million and $66 million, and earnings of between $140 million and $153 million.
The company warned uncertainties will continue to weigh in the second half amid continued mushroom pricing pressure, a stubborn raspberry crumble virus, and potential blueberry pricing pressure due to significantly higher than anticipated estimated NSW blueberry crop.
No further fruit fly incidents have been detected since the original incident in late May.
It also flagged that pre-harvest production costs will continue to increase ahead of future earnings, in line with its long-term growth agenda.
"Whilst our results to date have broadly been in line with the lower end of the latest guidance, trading and forecasting remains challenging with potential further downside risk," the company said on Friday.
Despite the difficulties, Costa said trading for tomatoes, avocados and berries had been favourable, while the outlook for the 2019 citrus season remained strong, although later in timing.
Costa will pay a fully franked interim dividend of 3.5 cents per share.
The company said its China expansion was on track to achieve a five-year roll out plan by 2020 with planning underway for further expansion in 2021.
COSTA'S DIFFICULT FIRST HALF
* Statutory profit up 1.0pct to $41.1m
* Revenue up 11.8pct to $573m
* Profit before SGARA, leasing and material items down 14pct to $40.9m
* Earnings before SGARA, leasing and material items down 8.4pct to $82.4m
* Interim dividend 3.5 cents per share, fully franked.