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Honey company Comvita is warning this year’s earnings and profits will be hit by the soft US and Chinese economies.
It said revenue for the first four months of the year was down about 10 percent on a year ago, and its operating earnings were about $6 million less, which has also affected its stock levels, debt and cashflow.
Comvita forecast revenue for the six months ended December up to 5 percent down on last year’s $112 million, with a 20 percent drop in operating earnings, and net debt between $80m and $85m, including debt for the acquisition of a business.
Chief executive David Banfield said the company could not avoid the impact of a slowdown in two major markets, but did not think it would last.
“We are forecasting that this is temporary in nature, as we see improving underlying demand and improving consumer sentiment data. Unfortunately, we do not believe it will be possible to make up this impact in this financial year.”
Its forecast for the full year is for revenue between $245m and $255m, compared to the previous year’s $234m, and operating earnings between $33m and $38m, ahead of last year’s levels, and also a lower debt.
“Comvita does not believe the first four months’ result is indicative of its underlying trading and is encouraged by the November performance which points to improving consumer confidence and demand,” Banfield said.
Demand in China appeared to be recovering with a lift in revenue in the recent “singles day” shopping event, while its other south-east Asia outlets had reported strong sales growth off “robust” consumer demand.
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