BLACKMORES: AUSTRALIA SLOWS, CHINA JUMPS

BLACKMORES suffered a 42 per cent decline in first half profit, the health food manufacturer announced today.

The company reported first half sales of $322 million, down 6 per cent from the same period last year. Its Australian business tanked 31 per cent on the benchmark of sales, taking in $158 million.

While relatively new ground for the company, China delivered $64 million in direct sales, up 92 per cent.

Overall, profit after tax declined 42 per cent to $28 million.

Blackmores CEO, Christina Holgate, (pictured) says the company did, however, finish the half in a stronger position than it started.

"Sales and profit improved in the second quarter compared to the first quarter. The first quarter was impacted by changes to the buying patterns of Chinese exporters and by high stock levels held by Australian retailers," says Holgate.

Holgate says there was an overstocking issue in the local market, which carried through into its Bega baby formula partnership, too.

Blackmores included a $2 million inventory provision in its first half results. 

Besides China, the other winner on the balance sheet was Blackmores' BioCeuticals and Global Therapeutics businesses, which include products like IsoWhey. Together their sales grew at more than 54 per cent compared to the prior corresponding period, totaling $51 million.

As she did when reporting on the last quarter, Holgate reiterated the full year is not expected to match 'the exceptional 2016 financial year result'. She indicates it will, however, represent 'good growth' on Blackmores' 2015 profit.

Blackmores will pay an interim fully franked dividend of 130c per share on March 22 from a record date of March 8. The dividend is 35 per cent less than it was paying shareholders last year.

The company is trading down 6.50 per cent on the ASX at 11am AEDT this morning, at $109 per share.

Business News Australia