Blackmores profit dip
BLACKMORES has been hit hard by regulatory changes in China, with the company’s shares briefly dipping below $100 yesterday as it announced its quarterly results.
Group sales dropped 8.1% and net profit after tax dived 46.6% to $12 million - but ceo Christine Holgate was upbeat.
She said the nutritional foods partnership with Bega had been “sluggish” (W 26 Oct) as the Australian market adapts to overstocking, but “we finished the quarter in a stronger position than we started with improved sales and profitability momentum.
“Importantly, consumer demand remains high, though our profit result for the first quarter was impacted by softer sales in Australia primarily as a result of changes in the export market which previously was largely serviced through Australian retailers,” she said.
Investments in operational infrastructure were also cited as impacting on the lower profit.
Holgate highlighted major growth in the company’s China business with in-country sales and sales from the new export division servicing the China market at $31m, up 220% on the prior corresponding period.
In-country Asia sales were reported up 37% and Blackmores’ launch into Indonesia in Sep has returned “encouraging early sales”.
Holgate said that overstocking appears to be easing, consumer demand remains robust and the growth of China business points to a strong future, consistent with “the Group’s strategic focus and long-term growth prospects”.