Cold weather, short season curtails Cobram Estate’s olive harvest

afr.com:

Cobram Estate, the country’s largest olive grower, said its harvest has been lower than expected, pushed down by an unusually cold and short season.

Last month, the company said it expected the combined harvest from its Australian olive groves would produce between 12.6 million and 13.2 million litres of olive oil, about 25 per cent below earlier expectations. On Tuesday, however, Cobram Estate said final production had been 12.5 million litres.

The harvest at Cobram Estate’s olive groves has come in under expectation. Christian Pearson

“Olive oil quality is excellent, with an historical high percentage of the oil produced being classified as premium or ultra-premium extra virgin olive oil,” the company told shareholders in a brief statement. Separately, it said Commonwealth Bank had extended core debt facilities to November 2027 and increased lending limits by $35 million.

Cobram Estate shares have sunk 15.4 per cent, or 22¢, since the start of the year. On Tuesday, they were trading up 1.7 per cent at $1.24. That means, according to Bell Potter analysts, the share price is close to the value of the underlying agricultural assets, “implying little for the brands”.

“The… market value of Cobram’s orchards, irrigation, property and processing assets was $441 million, a 32 per cent premium to the cost of development and a 67 per cent premium to the depreciated book value of the assets,” Bell Potter’s Jonathan Snape wrote. “Importantly this valuation covers orchards that are yet to reach maturity in Australia and the US. As immature orchards reach maturity we would expect further gains in Cobram Estate horticultural asset value.”

Mr Snape told clients that he increasingly expected domestic olive oil prices to climb this