Monday, February 26, 2024

Sticky situation for honey company

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Comvita warns market of tough times as US, China disappoint.
The apiary division broke even despite the major loss of honey extraction along the east coast from Cyclone Gabrielle.
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Honey company Comvita is warning of tough times ahead, with this year’s earnings and profits impacted by the flat United States and Chinese economies.

In a statement to the NZX, Comvita said revenue for the first four months of the financial year is down about 10% on the corresponding four months last year. Operating earnings were about $6 million less, which has impacted stock levels, debt and cashflow.

Comvita’s forecast revenue for the six months ended December is as much as 5% down on last year’s $112m, with a 20% drop in operating earnings. It has net debt of between $80m and $85m, although that includes 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. However, he is optimistic it won’t 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.

“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.

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