Comvita is New Zealand’s biggest honey company and probably the worlds largest producer of Manuka honey.
Comvita’s results statement covered trading across the last 6 months of 2017.
It showed a net profit after tax of $NZ3.7million on sales of $NZ83.6million.
This was a 45% improvement on the disastrous second half of 2016, when Comvita reported a loss of $NZ7.1 million on sales of $NZ57.7milliion.
CEO Scott Coulter said that the turnaround was driven by sales into the USA, where the company’s Manuka honey is now sold in Costco.
Sales into the USA totalled some $20million for the half year, compared to just $2million in the first half of 2016.
Chinese sales were also up strongly, although most of these are now being booked through a 51% owned joint-venture.
In Australia, sales jumped to $NZ17million for the half year, up from $NZ12million in the comparable period in 2016.
Surprisingly, despite the overall profit, Comvita’s accounts showed a significant cash outflow .
Net debt also increased in the latest half, which is also concerning.
However on the bright side, directors confirmed expecting a $17.1million profit for the full financial year.
However this may be affected by a forecast NZ honey harvest “slightly below that of an average year.”
Other noteworthy features of the results statement were Comvita’s positive outlook on the impact of the strict new NZ government standards for Manuka honey.
Coulter said that confusion about the standard had had some short-term impact in the market. However, in the longer term Comvita believes the new regulatory regime will open up a significant number of growth opportunities around the world.
In an investors presentation also released to the NZ Stock Exchange, Comvita said it expected the new standard to see a narrowing of the price difference between its UMF 5+ and its UMF 10+ Manuka honeys.
Presumably, it is expecting UMF 5+ Manuka honeys to become more expensive as the market adjusts to lower supplies.
For more information go to www.comvita.co.nz
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