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CAPILANO has increased its honey exports to China by 87 per cent in the half year to 31 December, but revenue and profit remains flat.
In the Brisbane-based company's half year results announcement today, it showed statutory net profit before tax decreased 3.8 per cent to $7.47 million, from $7.77 million the previous corresponding period.
Net profit after tax was $5.9 million, up from $5.5 million pcp.
The profit was impacted by a capital gain of $2.07 million from the sale of beekeeping assets to its newly established joint venture with Comvita Medibee Apiaries, which it sold for $9.2 milllion.
Revenue is down to $66.5 million from $67 million.
In the ASX statement, Capilano managing director Ben McKee says there was also a revaluation of honey stock.
This resulted in a $1.33 million downward adjustment due to a honey price reduction in December 2016, which compares to a $1.42 million gain last financial year.
The average cost of Australian honey for the six months to 31 December has risen to $5.58 per kilogram, from $5.64 per kilogram.
The company decreased its debt ratio from 52 per cent to 32 per cent while increasing its net assets from $39.2 million to $61.6 million as it entered two primary production joint ventures, one at Manuka in New South Wales and the other in Western Australia.
Earnings per share were down by 2c to $0.62 per share.
The company recently commenced exporting its new Beeotic product to parts of Asia and is seeking regulatory approvals in several foreign countries. It is already exporting to 30 countries.
"In both cases, we have organically grown beehive numbers to minimise disease risk, which requires splitting existing hives and initially reducing honey production," says McKee.
"This work has increased hive numbers that will improve our production performance in coming seasons."
Export of premium retail products will be a focus for the company as it pursues growth.
McKee says the company has always taken a considered approach to achieving distribution and sales into China, a country where sales are growing despite challenges.
"Having visibility of distribution so we can best manage the sales into this market to deliver sustainability, control and growth potential has been our priority. Despite the complications of exporting products to China, our exports to China continue to grow with an uplift of 87 per cent this half year," says McKee.
Capilano is trading up 3.06 per cent at $6.50 per share at 2:12pm AEDT.
Business News Australia
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