Costa (ASX:CGC) inks new leases adjusting 2022 earnings

Company News

by Melissa Darmawan

Costa Group (ASX:CGC) has flagged to investors that 2022’s earnings is slated to be $5 million higher while net profit after tax is set to be $6.4 million underpinned by newly signed long term leases. This update is likely to be immaterial to cash earnings.

The company is also the tenant of Macquarie Asset Management after the asset manager's acquisition of its landlord, Vitalharvest Freehold Trust, which leases three citrus farms and four berry farms.

The new agreement reflects current market conditions and was inked at the start of December with the expiry date in 2040, with a 10-year renewal option.

Due to this, its balance sheet will assume a $276 million right of use asset and a $276 million lease liability increase. Its forecast 2022 rent expense related to the new leases is $25.7 million.

Shares in Costa Group (ASX:CGC) are trading 0.5 per cent lower at $3.03.

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