Mānuka honey producer Comvita ‘disappointed’ at interim loss

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The NZX-listed company reported a loss of $3.2 million over the six months.
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Mānuka honey producer Comvita ‘disappointed’ at interim loss

Mānuka honey producer Comvita has reported a half-year loss in its interim results to December, as sales fell in its top markets China and North America.

The NZX-listed company reported a loss of $3.2 million over the six months, compared with a $4.2m profit the year before.

Revenue was down 7.8 percent over the same period to $103 million due to weaker consumer demand in China and losing a major customer in North America.

Meanwhile, its debt level rose after buying a business in Singapore and having to hold larger amounts of unsold stock.

Sales in China and North America were down 13 and 37 percent respectively, but other Asian and New Zealand and Australian sales were higher.

Chief executive David Banfield said the company was confident its business model and making premium manuka honey put it in a strong position “once macro-economic conditions stabilise”.

“After three-and-a-half years of consistent performance growing both top and bottom-line in line with our market guidance and strategic plan, we are disappointed in this result, which reflects current trading conditions.

“[We] have invested significantly over the last three years in our infrastructure and team capability to build a better, more scalable business at Comvita that is able to deliver on our 2030 ambition.”

Comvita forecasts full-year revenue between $225m-$253m – down slightly from previous forecasts of up to $255 million.
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As well as aiming to use fully recyclable, reusable and compostable packaging by 2025, the company has a target to become carbon-neutral by 2025 and net positive by 2030.

But Banfield said it was committed to sustainability, but also committed to reducing company expenses.

“We remain committed to delivering cost reductions in [the second half] to protect our earnings and are forecasting a further reduction of debt and inventory in the second half supported by positive operating cash flow. “

He said it expected improved sales in North America after gaining new business from premium retailers in the US and also the Middle East

It forecasts full-year revenue between $225m-$253m – down slightly from previous forecasts of up to $255 million.