Comvita ups earnings forecast despite below-average harvest

Manuka honey exporter Comvita has upgraded its earnings forecast. Photo / Hawke's Bay Today

Manuka honey exporter Comvita has upgraded its annual earnings forecast following completion of its third quarter.

The company said it now expects its operating Ebitda for the June year to be in a range of $22.5-$25.5 million, up from a previously announced range of $20-$23m.

"The increase in range is caused by ongoing strong growth in its focus growth markets of China and North America (offsetting Australia-NZ and Hong Kong challenges), strong performance in the digital channel now accounting for over 30 per cent of group sales, continued efficiencies in production and good cost control," the company said.

Comvita said its new harvest model had proven successful in 2021, despite this year's harvest being below average.

The quality of the harvest and good control of costs has meant that the harvest would deliver a small contribution to Group profits in this financial year, it said.

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 $3.5m 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.

Comvita has had a chequered earnings history, often due to the weather and seasonal fluctuations.

Complicating matters were regulatory changes over what constitutes mānuka honey.

For chief executive David Banfield, took over as chief executive in January last year, the goal was to produce sustainable earnings, year in and year out.

For the year to June 2020, Comvita's reported Ebitda came to $4.2m.

Its underlying full year Ebitda was $19.1m.