You are using an older browser version. Please use a supported version for the best MSN experience.

Oceania Natural Q3 sales growth stalls

NZN 30/01/2017 Paul McBeth

Oceania Natural's third-quarter revenue stalled earlier growth as an unstable grey market in China prompted the honey and noni juice products maker to rethink its distribution into the world's most populous nation.

Total revenue was $327,000 in the three months ended December 31, compared to $1 million in the second quarter, the Auckland-based company said.

The NXT-listed company last week scaled back its 2017 forecast as discounted rival honey products undermined its sales into China through grey markets, and forced it to focus on direct distribution channels.

Oceania Natural said sales were weighed on by the uncertainty over the definition of genuine manuka honey and an upcoming science report will be watched by the industry and consumers alike, while changing Chinese regulations and the rise of counterfeit manuka online meant it had to rely on slower distribution through direct channels.

Last week the company lowered its revenue target to $2.2m for the year ending March 31 from $5.4m. Sales into China via distributors are expected to be $605,000, down from a previous forecast of $4m, while Oceania's direct sales are projected to be $1.6m, up from $1.4m. The forecasts make up Oceania's key operating milestones (KOM) used on the NXT market instead of continuous disclosure requirements.

The third-quarter metrics show direct sales accounted for $138,000 of revenue in the period, while distributor sales totalled $189,000. Gross margin was 38 percent in the period.

Oceania last traded at $1.94, down from $2.16 when it lowered its forecasts last week.

image beaconimage beaconimage beacon