Cobram Estate Olives Posts A$11.9M Half-Year Loss, Raises A$177.8M for US Growth

Financial Performance and Market Dynamics

Cobram Estate Olives Limited (ASX: CBO) has released its half-year results for the six months ending 31 December 2025, revealing a net loss of A$11.93 million, a significant increase from the prior period's A$4.46 million loss. This widening loss reflects a combination of higher costs for both own-grown and third-party olive oil, alongside increased operating expenses, particularly in the United States.

Revenue for the period declined by nearly 7% to A$116.13 million, primarily due to the timing and pricing of non-extra virgin olive oil bulk sales. Despite this, the company’s premium Cobram Estate® brand demonstrated resilience, posting a 7% increase in sales to A$74.58 million, underscoring strong consumer recognition of its health and quality attributes.

Operational Cash Flow and Cost Pressures

Operating cash flow before interest and tax fell sharply to A$9.94 million from A$43.65 million in the previous half. Key factors included increased payments for third-party oil purchases in both Australia and the USA, higher water costs, and elevated marketing investments in the US market. These pressures highlight the challenges of managing supply costs amid fluctuating global olive oil prices and the company's strategic push into the American market.

Balance Sheet Strength and Capital Investment

The company bolstered its financial position through a substantial capital raise of A$177.84 million completed in late 2025. This capital injection improved net assets to A$510.08 million and reduced the net debt ratio to 21.7%, providing a solid foundation for ongoing expansion. Capital expenditure during the half focused heavily on US land acquisitions and grove development, totaling A$67.85 million, reflecting Cobram Estate’s commitment to scaling its vertically integrated operations in California.

Strategic Acquisition and Growth Outlook

In a landmark move, Cobram Estate Olives signed a binding agreement to acquire California Olive Ranch, Inc. for US$173.5 million. California Olive Ranch is a leading producer and marketer of Californian extra virgin olive oil, operating a fully integrated business with premium brands including the top-selling California Olive Ranch® EVOO in the US. The acquisition, pending regulatory approval, positions Cobram Estate as a dominant player in the US market and aligns with its growth strategy.

Looking ahead, the company expects the 2026 Australian olive harvest to be moderately lower than the previous year but still robust, with a material positive fair value gain anticipated in the full-year results. US packaged goods sales are forecast to strengthen, supported by increased supply from own groves and third-party purchases secured for the coming year.

Dividend and Shareholder Returns

Cobram Estate Olives maintained shareholder returns with a fully franked dividend of 4.5 cents per share paid in November 2025. The company also offered a Dividend Reinvestment Plan, which saw over 1.25 million new shares issued, reflecting ongoing shareholder confidence despite the challenging half-year financial performance.