Biotechnology company A2 Corporation is reporting an annual net loss 22.9 per cent higher at $6.3 million as it invests in expansion into North America, Australia and Asia.
The result for the year to the end of March compared to a loss of $5.1m a year earlier, and
came on total operating revenue down 63.1 per cent to $2.8m, from $7.6m previously.
The company said revenue from ordinary activities decreased during the period as Australian subsidiary A2 Exports ceased trading activities in May 2007. There was a corresponding decrease in costs.
From last June, trading in Australia was undertaken through a newly-formed joint venture, A2 Dairy Products Australia (A2DP) in which A2 Corporation had a 50 per cent participating interest.
Current period revenue also included $1.4m from the sale of a perpetual licence agreement to A2DP. A2 Corporation chairman Cliff Cook said the loss was primarily due to investment in key parts of the company's business which would in the long-term benefit the group through increased revenue streams and ultimately the generation of profits.
"A2C is still in the important building phase where we have to keep investing in our key assets, our joint ventures, and meet marketing costs to establish new markets and grow our main existing market of Australia," Mr Cook said.
"We are confident that these investments and our focus on value-added functional products will deliver profits for the company."
The A2 Corporation board had reviewed alternatives for raising additional capital, and the final form of the proposed capital raising should be made known to shareholders in two to three weeks.
The company said that highlights in A2 Corporation's largest market Australia for the new joint venture included a large increase in the volume of a2 milk sold.
A2 Corporation chief executive Anthony Lawler said monthly sales volume in Australia went from 305,000 litres in April 2007 to 600,000 in March 2008, a 97 per cent increase.
Last month's sales had increased to more than 870,000 litres, almost triple that of a year ago on a monthly basis.
- NZPA
