Cobram Estate Olives Reports A$268.9m Revenue and A$4.2m Loss in FY26

Revenue Growth Masks Profit Slide

Cobram Estate Olives (ASX:CBO) delivered a mixed FY2026 result, with revenue climbing 11.3% to A$268.9 million, driven largely by its recent acquisition of California Olive Ranch (COR) and ongoing growth in packaged goods sales. However, the company swung to a net loss of A$4.2 million after tax, a sharp reversal from the prior year’s A$49.6 million profit.

The loss reflects a combination of factors including a smaller Australian olive crop due to the natural biennial cycle, elevated production costs; particularly water prices in Australia that surged to a weighted average of $349 per megalitre from $139 previously; and integration expenses related to COR. Non-cash warrant expenses of A$41.8 million and transaction costs of A$4.8 million associated with the acquisition further weighed on earnings.

US Acquisition Bolsters Growth Platform

In March 2026, Cobram completed its transformational acquisition of COR for approximately A$245 million, instantly making it the largest olive oil producer and marketer in the US. The deal added the leading California Olive Ranch® and Lucini® brands, expanding Cobram’s Californian grove footprint to about 3,000 hectares of owned and leased groves, plus 4,600 hectares of contracted third-party groves.

FY2026 results include three months of COR trading, with USA packaged goods sales surging 63.1% to A$87.5 million. The acquisition has unlocked synergies estimated at US$12 million annually by FY2027, with a target of US$20 million by FY2030 through improved yields and cost efficiencies. The company is transitioning the California Olive Ranch® brand back to 100% Californian olive oil by the end of FY2027, reinforcing local provenance.

Australian Operations Face ‘Off-Year’ and Competitive Pressures

Australia remains a core market, accounting for A$170.6 million in olive oil sales, though down 1.3% from FY2025. Cobram Estate® branded sales grew 2.1%, outperforming a category that declined 2.6%, despite aggressive promotions by imported brands. The Australian olive harvest produced 11.1 million litres of oil, reflecting the expected lower-yielding “off-year” in the biennial production cycle.

Higher water costs and a modest reduction in average selling prices due to competitive trading conditions compressed Australian EBITDA to A$52.1 million from A$110 million the prior year. The company anticipates a materially larger “on-year” harvest in FY2027, supported by maturing groves and favourable seasonal conditions.

Balance Sheet Strengthened Amid Increased Borrowings

Cobram’s adjusted asset base expanded to A$1.4 billion at 30 June 2026, buoyed by the COR acquisition and capital investments in grove developments and site expansions in the USA. Net debt rose to A$437.3 million, reflecting increased borrowings to fund the acquisition and growth projects.

Despite the short-term earnings pressure, the company’s two-year rolling average EBITDA remained steady at A$90.9 million, underscoring the underlying strength of its vertically integrated model. Cash flow from operations declined to A$47.5 million, impacted by strategic inventory build and higher input costs.

Dividend Steady and Governance Update

The Board declared a final fully franked dividend of 4.5 cents per share, unchanged from FY2025, payable on 6 November 2026. The company also announced its 2026 Annual General Meeting will be held on 30 October, with director nominations closing on 10 September.

Key management changes include the appointment of Daniel Masters as Non-Executive Director in April 2026, adding governance depth amid the company’s expanding US footprint. Joint-CEOs Leandro Ravetti and Sam Beaton continue to lead operations from the USA and Australia respectively.

Sustainability and Innovation Drive Long-Term Value

Cobram continues to advance its 2030 Sustainability Strategy, delivering progress on emissions reduction, water productivity, waste diversion, and biodiversity projects such as the Malleefowl Conservation Program. The company’s integrated Oliv.iQ® system supports superior yields and sustainable farming across its Australian and US groves.

Investment in marketing and healthcare professional education aims to build consumer trust and category growth, particularly emphasizing the health benefits and freshness of premium, locally produced extra virgin olive oil.

What to Watch Next

FY2027 will be a pivotal year for Cobram Estate Olives, with expectations of a stronger Australian “on-year” harvest and the first full-year contribution from COR. The company’s ability to manage elevated input costs, realise acquisition synergies, and navigate competitive pressures in both markets will be critical. The ongoing legal dispute over a purchase price adjustment related to the COR acquisition adds an element of uncertainty.

Investors should also monitor the company’s progress in expanding Californian grove plantings and operational efficiencies, as well as the impact of macroeconomic factors such as water pricing and consumer spending on premium food products.

In a sector where agricultural cycles and market dynamics are intertwined, Cobram Estate Olives’ vertically integrated model and brand portfolio position it well; but execution risks remain as it scales its US operations and manages short-term earnings volatility.