Comvita said it continues to restructure and reduce costs as its net loss broadened in the six months ended December 31.
The Manuka honey brand’s net loss widened to NZ$6.5 million (A$5.9 million) as revenue dipped 5.3 per cent to $99.7 million.
“While our response to competition has required some discounting and promotional programs of our own, which impacted margins, there have been some benefits with segmentation of the market opening up the category to a wider consumer base,” said Brett Hewlett, Comvita CEO.
Australia and New Zealand sales fell 19.4 per cent to $15.5 million while China sales slid 12.2 per cent to $41.2 million.
North American sales grew 12 per cent to $14.6 million despite the company losing a large club retailer in the US, following a global request for proposal process that looked closely at quality, security of supply, sustainability, and other ESG credentials. Rest of Asia sales climbed 14.9 per cent to $22.1 million.
Comvita’s gross profit plunged 21.1 per cent to $50.5 million, and gross margin declined to 50.7 per cent.
“While industry-wide surpluses of honey exist both in NZ and in-market, we expect a right-sizing of supply will result in an unwinding of the glut over the next one to two years, resetting wholesale honey prices,” said Hewlett.
The company forecasts sales to be broadly flat throughout the financial year, with the rest of Asia and North America continuing to improve steadily.
Meanwhile, the company noted that it became aware that certain sales may have been misreported in FY23 and FY24, leading to an overstatement of post-tax earnings by $1 million and $3 million, respectively, in those financial years.
Comvita said that is working through a total restructure with a smaller team, which includes a headcount
reduction of four in the leadership team and a move from an eight-person to six-person board.
A recruitment for a new Comvita CEO is underway.
