ASX 200 drops again, Zip sinks, Worley wins

The S&P/ASX 200 Index (ASX:XJO) has dropped again today. Horticultural business Costa Group Holdings Ltd (ASX:CGC) announced another acquisition.

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The S&P/ASX 200 Index (ASX: XJO) dropped by 0.7% today to 6,710 points.

Investors continue to sell off various businesses on the share market. Volatility is rising again. 

Here are some of the highlights today:

ASX tech shares sold off again

The share prices of many ASX tech shares dropped again today in reaction to concerns about rising bond yields.

Looking at some of the biggest names, the Afterpay Ltd (ASX: APT) share price dropped 2.5%, the Xero Limited (ASX: XRO) share price fell 2.4% and the Zip Co Ltd (ASX: Z1P) share price declined by 5.25%.

Costa Group Holdings Ltd (ASX: CGC)

Food business Costa announced that it has signed conditional agreements to buy the farming operations of KW Orchards citrus farm and the packing operation called EJT citrus packing facility. Both of these assets are in south west New South Wales and are within the Sunraysia region.

This acquisition will increase Costa’s citrus plantings in the Sunraysia region to around 700 hectares, with KW Orchards having 600 hectares of land of which 312 hectares is citrus planting and 45 hectares is wine grapes.

Costa said that KW Orchards has an attractive varietal mix well suited to the export market, and it will play an important role in our capacity to take further advantage of strong export demand.

The ASX 200 food business explained that the acquisition is expected to be slightly earnings accretive in 2021, with year on year yield growth providing forecast growth of earnings in future years.

The company has started a preliminary plan for making a large, advanced citrus packing facility in Mildura, Victoria, which is also located in the Sunraysia region. It will have the ability to pack both Costa and third-party volumes from the Sunraysia region.

Costa said that the acquisition brings the total farmland to 3,435 hectares in the South Australian Riverland and Sunraysia region.

This acquisition will be funded by debt facilities and is expected to be completed in late March 2021.

The Costa share price ended the day down 1.1%.

Worley Ltd (ASX: WOR)

The Worley share price fell around 0.2% today despite announcing a contract extension win.

Worley said that INEOS has extended its master services agreement for its Grangemouth, UK site where it produces core chemical products such as ethylene, polyethylene and ethanol.

The ASX 200 company will provide small capital engineering services for ongoing maintenance and upgrades to the INEOS assets.

Worley CEO Chris Ashton said:

Worley has been at Grangemouth for more than 20 years and this extension of our master services agreement reinforces the strong relationship the Worley team has developed with INEOS O&P UK. We look forward to continuing our relationship and helping INEOS O&P UK achieve its sustainability goals.

Fonterra Shareholders’ Fund (ASX: FSF)

The Fonterra share price went up 1.5% today in reaction to an announcement about its farmgate milk price.

Fonterra said that it’s lifting its forecast farmgate milk price to a range of NZ$7.30 to NZ$7.90 per kilo of milk solids, up from a range of NZ$6.90 to NZ$7.50 per kilo of milk solids.

This is due to consistent strong demand for New Zealand dairy, with global dairy trade prices continuing to rise since February.

The midpoint of the range, where farmers are paid at, has increased to NZ$7.60 per kilo of milk solids.

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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