Blackmores profit slips 14 per cent
Australian health supplements company Blackmores has reported a 14.3 per cent drop in net profit for the nine months to March 31, falling to $44.2 million, compared with $51.6 million in the same period a year ago.
Profit fell 43 per cent in the three months to end-March.
The weak quarter, follows the company’s warning in February of weaker sales in China.
From January 1, Chinese companies that import goods online need to be registered with the government, while certain products were also required to pass through government-linked customs warehouses where they incurred tax.
“The third quarter has been challenging for the company,” said interim chief executive Marcus Blackmore, the founder’s son who owns a quarter of the company and stepped into the role last month following the departure of its last chief executive.
“We firmly believe that this result does not reflect the long-term growth potential of the business. We are committed to a major streamlining of the business, to simplify and improve our processes and structure.”
For Blackmores, which racked up double-digit sales growth in fiscal 2018, largely due to China sales, the regulatory change comes on top of a spending slowdown in late 2018 as trade tensions with the United States eroded Chinese consumer confidence.