Earlier in the year, Graincorp (GNC) announced an insurance/derivative deal to manage it's weather/drought exposure. I'm not invested in Graincorp (or Costa) - but I remembered reading the article and I re-read it when I saw the drop in Costa today.
I hope this works: but here is a link to the SMH article FYI. It's interesting reading. (disallowed/business/companies/graincorp-buys-itself-a-decade-s-worth-of-drought-insurance-20190607-p51vfp.html)
Does anyone know whether Costa has anything like this in place?
In the 'risks' section of the slide deck Costa put out today, 'weather' was the first risk listed, and the deck states that Costa can be impacted by weather more than its competitors. There is some talk of insurance for hail damage - but nothing on temperature or rainfall and no reference to anything like in the Grainco release.
I would like to see all significant primary producing companies disclose what they are doing in this space - ie. what they are doing to manage their risk and reduce exposure to climate events and fluctuations. Even if they did not buy these products - it would be good to know what they considered and why they did not buy them as it's pretty fundamental to their business.
Costa may have listed this all out in other releases. I don't know as I've not been following. Thought I'd share the link to the GNC article and see what long term Costa holders knew on this issue - as I'm going to have a closer look at the company over the next few months (I cannot resist picking pennies up in front of bulldozers (to use the phrase someone used above). I've been squashed a few times - but I also have some nice, shiny pennies too.
Thanks in advance to all who can share any info on this element.
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