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Honey firm Oceania Natural cuts forecast

NZ Newswire logoNZ Newswire 23/01/2017 Paul McBeth

NXT-listed Oceania Natural has slashed its 2017 revenue forecast as deep discounts on rival honey products undermine sales into China.

The Auckland-based company lowered its revenue target to $2.2 million for the year ending March 31 from $5.4 million.

Sales into China via distributors are expected to be $605,000, down from a previous forecast of $4 million, while Oceania's direct sales are projected to be $1.6 million, up from $1.4 million.

Oceania's warning comes a day after manuka honey health products maker Comvita slashed earnings guidance.

The NXT-listed company, which sells products derived from manuka honey and noni juice, said direct sales into China began in September last year, and will be Oceania's dominant sales channel for 2017.

While sales will be lower than expected, Oceania retained its projection for gross margin to be 40 per cent.

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