Comvita back in profit driven by US and China markets, dividends to resume

Comvita has returned to profit in the first half. Photo / Hawke's Bay Today.

Mānuka honey exporter Comvita returned to profit in the first half, driven by growth in its China and North America markets.

The company's net profit came to $3.5 million in the six months to December, compared with a $12.97m loss in the previous corresponding period.

Operating ebitda came to $10.6m compared with a loss of $8.8m.

Revenue rose by 5 per cent to $98.9m, with strong growth seen in its key growth markets and its core mānuka category.

Marketing investment designed to support Comvita's long-term growth ambition increased 25 per cent.

Comvita maintained its guidance of an ebitda range of $20m-$23m for the June 30, 2021, year and said it planned to resume dividend payments at the end of that year.

Chairman Brett Hewlett said he was pleased with the company's progress.

"The board and management have continued to transform the business at pace looking to ensure we deliver the performance that all Comvita stakeholders should expect," he said.

Group chief executive David Banfield said Comvita's focus on growth markets, China and North America showed strong performances, delivering double-digit top and bottom-line growth.

China is the world's biggest honey market valued at $1.8 billion and Comvita's long-term goal is to target market growth and market share growth in the PRC.

Revenue in China grew 20 per cent and its net contribution 28 per cent versus the previous corresponding period as Comvita invested in long-term brand building activity.

There were "headwinds" in Australia and New Zealand because of Covid-19 disruption in the unofficial daigou trade channels into China.

Comvita group chief executive David Banfield. Photo / Matt Crawford

Comvita said the business in Australia and New Zealand had traditionally been focused on tourism, travel, daigou, cross-border and retail serving Asian consumers.

Revenue in Australia fell $5.5m because of the challenges in these channels, it said.

Comvita said success in its home markets was a prerequisite for long-term success.

Over the six months, net debt decreased by $1.6m and honey inventory fell by $14m.
Shares in Comvita last traded on the NZX at $3.20, down 12c on Wednesday's close.