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Manuka honey producer Comvita has warned it could book a “material” impairment charge for the 2025 financial year concluding at the end of this month.
In a trading update issued today (16 June), the New Zealand-based business said it is “assessing the level of a non-cash impairment of assets and provision against inventories, which are expected to be material”.
Excluding any impairment, Comvita said it expects to post a net loss before tax of NZ$20m ($12.1m) to NZ$24m ahead of the final results due in August.
Comvita also flagged today that its net loss before tax for the previous 2024 fiscal year will likely be restated to NZ$85.8m from the NZ$81.9m loss first reported. Impairments and other asset write-downs for that year will remain at NZ$64.2m.
That same year, Comvita record a net bottom-line loss of NZ$77.4m, compared to a NZ$11m profit a year earlier.
Comvita said today it “continues to operate in a challenging global environment, with ongoing market volatility impacting both revenue and margin realisation”.
The company added that revenue is expected to “decrease slightly” from the NZ$204.3m in 2024.
The gross margin for the full year is expected to decline due to “aggressive pricing and channel loading by competitors”.
Earlier in June, Comvita appointed Karl Gradon as its new CEO. The company had not had a permanent chief executive since David Banfield stepped down in August last year.
Brett Hewlett, who was the chair at the time and had formerly been Comvita’s CEO, took on the role of acting chief executive.
The business is targeting annualised costs savings of NZ$15-$20m, which are “currently running ahead of target”, Comvita said today.
But it added that full-time headcount had been reduced by 70 staff.
Comvita added that while net debt had been cut from NZ$81.6m at the end of the last fiscal year to an expected NZ$63m in fiscal 2025 further measures may be needed.
“The board has determined that additional action is required to ensure the debt position is sustainable and accordingly, is working with its investment banking and legal advisors to explore all options available to the company”.
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