Comvita (CVT) H1 2025 earnings summary

Executive summary

• Reported a net loss of $6.5M for the first half of FY25, compared to a $2.5M loss in the same period last year (restated), with revenue down 5% to $99.7M and gross profit down 20% to $50.5M.

• Significant inventory reduction and improved cash flow performance achieved through operational refinements and cost controls.

• Accounting irregularities in China and Singapore subsidiaries led to restatements, tighter internal controls, and a culture reset focused on trust and transparency.

• Ongoing restructuring includes headcount and board reductions, cost savings, and a "back to basics" repositioning to restore operational focus.

• Market and industry conditions remain challenging, but outlook is improving into FY26.

Financial highlights

• Revenue for HY25 was $99.7M, down 5.3% year-over-year; gross profit was $50.5M, down 20.1%, with gross margin declining to 50.7% from 60.0%.

• Operating cash flow improved to $9.8M, a $16M increase year-over-year; free cash flow positive at $2.0M, up $28M year-over-year.

• Net debt at $81.6M at period end, down $16.5M over Q2, with inventory reduced by $15M since June 2024.

• Operating expenses decreased by 8.5% to $56.0M; restructuring costs of $2.1M incurred in the half.

• Basic and diluted EPS: (9.21) NZ cents, compared to (3.50) NZ cents year-over-year.

Outlook and guidance

• Sales expected to remain flat through FY25 and FY26, with China market soft and gradual improvement in Asia and North America.

• Margins have stabilized, with further improvement anticipated as lower cost inventory flows through.

• Full benefits of restructuring and cost savings expected to be realized in FY26.

• Directors remain confident in ongoing bank support and constructive lender negotiations.

• Industry honey harvests projected to be below average in 2024 and 2025, but supply security is strong.