Cobram Estate Olives (ASX:CBO) reported first-half FY2026 results for the six months ended 31 December 2025, with management emphasizing the impact of agricultural accounting and a continued focus on supply, brand growth, and the pending acquisition of California Olive Ranch (COR).
Half-year financial results and accounting context
Joint CEO Sam Beaton opened the presentation by reiterating that accounting standards require the company to recognize profit related to the crop in the year of harvest rather than the year of sale, using an estimate of net fair value for oil and deducting selling costs. Beaton said that in Australia, the fair value increment related to the crop is not recorded at the half-year and is instead recognized in the second half, which the company expects to be “materially positive.” In the U.S., where harvest finished in November/early December, a fair value adjustment was recognized in the first half and totaled AUD 1.3 million.
- Underlying EBITDA of AUD 9.5 million, slightly ahead of the December 2025 guidance range of AUD 4.5 million to AUD 7.5 million, and down from AUD 14.5 million in the prior corresponding period.
- Net loss after tax of AUD 11.9 million, compared with a net loss of AUD 4.5 million a year earlier. Management noted this includes AUD 2.4 million of transaction costs accrued to 31 December 2025 related to the COR deal, which were excluded from underlying EBITDA.
- Cash flow from operations of AUD 9.9 million before interest and tax, within the company’s prior guidance, but materially lower than the prior year.
- Packaged goods sales of just under AUD 110 million, described as flat year over year.
- Net debt ratio of 21.7%, down from 32.7% following the company’s September–October 2025 capital raise.
Business unit performance and sales trends
Beaton said the company views its operations through two business units: Australian olive oil and U.S. olive oil.
In Australia, EBITDA was AUD 8.8 million, down slightly from the prior year. Beaton said the net selling price of oil sold in the half was slightly higher year over year, but results were impacted by higher costs of extra virgin olive oil sold, largely related to the company’s own oil valued at 30 June 2025 and a smaller amount of purchased third-party oil.
In the U.S., EBITDA was just over AUD 700,000, down from AUD 2.6 million. While net selling price improved versus the prior corresponding period, Beaton said the benefit was more than offset by increased marketing spend and overhead costs aimed at supporting future growth, along with smaller increases in olive oil sold, packaging, and distribution costs.
On sales, management said packaged goods were flat overall in a period that featured “aggressive discounting” by competitors in both Australia and the U.S. Beaton said net selling price in both markets was slightly ahead of last year.
In Australia, Cobram Estate-branded sales increased 9.3%, which management said reinforced its view that consumers recognize the brand’s differentiated position on health and quality.
In the U.S., packaged goods sales increased 6.2%, driven predominantly by private label. Cobram Estate growth was “just under 1%,” but Beaton noted that excluding one-off Costco job lots in the prior period, supermarket packaged goods sales increased 5.5%. Management said it expected a stronger second half in the U.S., supported by improved oil supply.
Cash flow, capital spending, and liquidity
Operating cash flow before interest and tax declined AUD 33.7 million year over year to AUD 9.9 million. Beaton attributed the change to a combination of working capital and spending factors, including:
- AUD 3.8 million higher water purchases in Australia due to materially higher water prices.
- AUD 6 million higher purchases of third-party oil in Australia, which management said positioned the company for an Australian off-crop year.
- Third-party oil purchases in the U.S. of just under USD 6 million, which management said would help support sales through to the next harvest.
- AUD 9.2 million reduction related to the timing of non-extra virgin bulk oil sales, which management expects to be “materially higher” in the second half.
- AUD 2.3 million higher operating expenses, mainly tied to increased marketing and overhead in the U.S.
- AUD 6.4 million tied to other working capital timing, “predominantly around the collection of debtors.”
During the half, the company paid AUD 17.4 million in tax, which Beaton said reflected the record FY2025 profit and the start of income tax installments. Cobram Estate also invested AUD 67.9 million in property, plant, and equipment, primarily related to U.S. land acquisitions, development, and expansion of its industrial facility and mill in California.
The company paid a fully franked dividend that increased from AUD 0.033 to AUD 0.045, totaling AUD 17.5 million net of the dividend reinvestment plan. It also completed an equity raise totaling AUD 177.8 million net of transaction costs, leaving AUD 115.4 million in cash at 31 December 2025.
Beaton said that since the period end, the company signed an agreement with Commonwealth Bank of Australia to extend debt facilities to February 2029 and increase facility limits by AUD 152.2 million, with AUD 76.9 million conditional on completion of the COR transaction. Including the additional facility, management said available liquidity would have been AUD 267.6 million at 31 December.
California Olive Ranch acquisition: timing, brands, and synergies
Joint CEO Leandro Ravetti provided an update on the proposed acquisition of California Olive Ranch, which Cobram Estate announced on Christmas Eve. Ravetti said Cobram entered a binding agreement to acquire COR for USD 473.5 million via a combination of cash, vendor notes, and an earn-out. As of 30 September 2025 (COR’s fiscal year-end), COR reported net assets of USD 132.6 million on a cash-free, debt-free basis, Ravetti said.
Strategically, Ravetti said the transaction would expand Cobram’s planted footprint in California from roughly 1,400 hectares to about 3,300 hectares, and provide opportunities to apply Cobram’s “Oliv.iQ” and “more than olive” expertise. He said the company expects the transaction to be approximately 9% EPS accretive from FY2027, the first full year of integration.
Ravetti described COR as the number 1 selling California-produced extra virgin olive oil in U.S. supermarkets and the number 4 olive oil brand overall. He also highlighted Lucini, which COR acquired in 2015, as the number 1 super premium imported extra virgin olive oil brand in the U.S. Ravetti said the company’s three brands together generated more than USD 211 million in retail sales in the 12 months to November 2025, noting the figure excluded major retailers including Costco, Ingles, Whole Foods, and H-E-B.
COR reported EBITDA of USD 16 million for the year ended 30 September 2025, Ravetti said, adding that EBITDA in the prior two years was affected by higher imported olive oil prices and tight European supply conditions.
On synergies, Ravetti said Cobram expects to achieve approximately USD 12 million in annualized savings during FY2027 from initiatives including reduced overheads, improved infrastructure utilization, labor pooling, freight optimization (including fruit freight to mills), milling efficiency gains, supply chain efficiencies, expanded direct distribution, and reduced brokerage costs. Further out, the company expects annualized synergies to exceed USD 20 million by as early as 2029 or 2030, driven largely by yield improvements as Cobram invests in COR orchards and implements Oliv.iQ principles.
Management also addressed regulatory timing. Beaton said the acquisition remains subject to antitrust approval from the U.S. Department of Justice and that the company has been responding to voluntary information requests. He said it was “very unlikely” the deal would complete by 28 February (as contemplated in the December announcement) but the company expects approval on or before 12 March, with completion around two weeks later.
Operations: crop outlook, water, and capacity expansion
Ravetti said Cobram’s 2025 California harvest finished on time in early December, producing around 3 million liters of olive oil, and the company purchased an additional 800,000 liters from other California millers to support sales. He said oil produced from the company’s own groves represented 28% of total supply, up from 23% in FY2025 and 11% in FY2024, reflecting orchard maturation and the impact of Oliv.iQ.
Ravetti said the expansion of the company’s finished goods warehouse and installation of a new bottling line—intended to quadruple bottling capacity—remained on track for completion by the end of the financial year.
In Australia, management said FY2026 is an “off year” for the crop, but Ravetti said current assessments suggest yields should be only moderately below FY2025 levels if typical conditions hold through harvest. He added that input and operating costs remained stable aside from water. Ravetti said the company had secured about 70% of full-year water needs at a weighted average price of AUD 327 per megaliter.
On investor questions, management said it did not expect to pass higher water costs through to consumers “right at this stage,” and Ravetti said a January heatwave occurred during the “pit hardening” stage, which is typically less critical to yields than later oil accumulation, with early measurements appearing normal.
About Cobram Estate Olives (ASX:CBO)
Cobram Estate Olives Limited operates as a food and agribusiness company with olive farming and milling operations in Australia and the United States. Its olive farming assets include various olive trees of freehold farmland in Australia and long-term leased and freehold properties in California. The company also owns olive tree nursery, olive mills, olive oil bottling and storage facilities, and olives laboratory. Its portfolio of olive oil brands includes Cobram Estate and Red Island. The company also exports its products.
