Infant formula maker Bellamy’s posted a full year loss of $809,000, a long way from the $38.33 million profit of the previous 12 months.
Revenue was $240.18 million, well below analyst expectations of about $330 million before the company hit a roadblock for sales into China.
However, the company has made some progress in restructuring the business, resetting costs and managing inventory, after sales in China slumped last year because of regulatory changes.
“We are 6 months into an 18 month turnaround, we are tracking well but there are still challenges to navigate,” says CEO Andrew Cohen. “Importantly, the stability of the business has improved.”
He says sales have stabilised and have gained momentum leading into 2018.
“The company is mindful of the need for a better understanding of China’s regulatory environment,” he says.
“We are focused on spending more time in China, building knowledge, capability and deeper relationships with our key distributor, customers and regulatory bodies.”
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Bellamy’s spectacular growth via China suddenly stalled late last year following regulatory changes.
The fallout claimed the scalp of CEO Laura McBain, stripped millions of dollars from the market capitalisation and sparked a shareholder revolt which ended with a change in the board of directors.
Earlier this month, the company’s subsidiary Camperdown Powder, which produces milk power, had the suspension of its license lifted by the Certification Accreditation Administration (CNCA) in China.
Camperdown’s certification was suspended soon after Bellamy’s closed the purchase in July of the Victorian business.
The licence is seen as a key strategic acquisition, a trouble free route to the China market for Bellamy’s. The company paid $28.5 million for an indirect 90% interest in Camperdown Powder.