The Costa Group Holdings Ltd (ASX: CGC) share price is launching upwards after the company's management updated the market on its performance and outlook for 2022.
Costa has been hit with expected higher fertiliser, packaging, and export shipping costs. Though, it's hoping to offset some of the expense with stronger pricing.
At the time of writing, the Costa share price is $3.16, 8.59% higher than its previous close.
Let's take a closer look at the latest news from the grower, packer and marketer of fresh fruit and vegetables.
Costa releases performance and guidance update
The Costa share price is in the green after the company outlined its strong start to 2022 in its annual general meeting (AGM).
The company's berry operations have been going well. Production reached record levels in China, though lockdowns in the nation challenged the business.
Back home, Tasmania's latest berry season went better than 2021. That of North Queensland is also off to a strong start.
Pricing for Western Australian avocados started the year off on the wrong foot, but the transition from Shepard to Hass has brought more positive movements.
Finally, pricing and volumes for grapes have both bolstered this year, which happens to be a citrus 'off year'. Only 1% of the company's citrus crop has been harvested at this point.
Looking to the rest of 2022, the company expects its operating and growth capital expenditure to be in line with previous guidance.
Costa's prior guidance of around $130 million of depreciation and amortisation expenses also stands. As does interest costs of around $38 million.
That reflects the impact of 2021 acquisitions and the renegotiation of seven farm leases taking effect late last year.
The leases were previously through Vitalharvest. They're now leased from Macquarie Group Ltd (ASX: MQG)'s Macquarie Asset Management.
As the company has previously stated, its earnings before interest, tax, depreciation, material items and fair value movements in biological assets was expected to be around $5 million higher, relative to the old leases, this year.
Its net profit after tax (NPAT) (excluding certain items) is also predicted to be $6.4 million lower in relation to the leases.
Costa share price snapshot
Today's gains haven't been enough to boost the Costa share price back into the long-term green. Though, it's still outperforming the S&P/ASX 200 Index (ASX: XJO) this year.
Right now, the company's shares are trading at 4.29% higher than they were at the start of the year. Meanwhile, the index has slumped 3.54%.
Looking further into the past, however, things are different. The ASX 200 has gained 1.92% over the last 12 months, while the Costa share price has tumbled 25.3%.
A previous version of this article incorrectly stated Costa expected its full-year 2022 earnings before interest, tax, depreciation and amortisation to be around $5 million higher and its net profit after tax to be $6.4 million lower. This was incorrect as said figures relate solely to the earnings impact of specific changed lease arrangements. The Motley Fool Australia apologises for the error.
