Comvita (CVT) H2 2024 earnings summary

Executive summary

• FY 2024 revenue was NZD 204.3 million, down 12.7% year-over-year, driven by macroeconomic slowdown, price competition, and honey market contraction in key regions, with significant declines in Greater China and the U.S. markets.

• Reported EBITDA was a loss of NZD 59.6 million, with underlying EBITDA at NZD 14.6 million, both sharply lower than the prior year.

• Net profit after tax reported a loss of NZD 77.4 million, including a non-cash impairment of NZD 59.8 million before tax and non-recurring costs.

• Cost-out program targeting NZD 10–15 million in annualized savings is underway, with 53 positions already reduced and a focus on agility and debt reduction.

• Early signs of market stabilization in China and ongoing premiumization and product innovation initiatives.

Financial highlights

• Gross profit margin was 55%, down 300 basis points year-over-year due to lower manufacturing recoveries and apiary revaluation.

• Operating cash flow was NZD 5.3 million, down from NZD 8 million the previous year.

• Interest charges increased to NZD 8.7 million, NZD 3 million higher than last year.

• Net debt increased NZD 26.3 million to NZD 79.7 million, driven by debt-funded acquisitions and lower operating cashflows.

• Inventory at NZD 134.4 million, with finished goods up NZD 17.1 million due to unmet forecast demand.

Outlook and guidance

• No formal EBITDA guidance provided due to economic uncertainty; previous NZD 50 million EBITDA target withdrawn.

• Focus remains on cash flow generation, inventory reduction, and debt repayment.

• New bank covenant structure expected by September, with banks remaining supportive.

• Global honey category forecast to grow at a 6.5% CAGR to 2030, with early signs of stabilization in China and July 2024 Mānuka sales up 7.3% year-over-year.