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Thursday 25th February 2010 |
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A2 Corp, the speciality milk products manufacturer, made a reduced loss of $717,172 in the six months to December 31, thanks to the elimination of debt servicing costs and a strengthening performance from its Australian joint venture.
The result was a 60% improvement on the $1.993 million net loss recorded for the same period a year earlier, despite a 40% slump in operating revenue to $249,000 from $416,000.
The NZAX-listed company offset a $1.057 million trading loss on its New Zealand operations with a $405,999 contribution from its share of earnings in Australia, where the company is placing major efforts on a new strategy to brand A2 products for their health benefits.
"This position is in contrast to the long held view that A2 was an IP (intellectual property) company," chairman Cliff Cook said in a statement to the NZX. "It is not. It is a branded company where the brand is supported by a strong, unique and valuable suite of intellectual property."
The repositioning follows last year's appointment of a new chief executive, Scott Pannell, who comes from a fast moving consumer goods background.
Australian sales of A2 products by milk volume rose from 6.6 million litres in the previous corresponding period to 7.6 million litres in the six months under review, while earnings before interest and tax improved to A$1 million in the latest period, against an EBIT loss of A$3.5 million a year earlier.
A major factor in the improved result was the absence of interest repayments on company debt following capital-raising in the last financial year. In the prior corresponding period, interest costs were $406,000.
Notes to the accounts show that 50%-owned A2 Milk Company LLC losses borne by the group fell to $32,000 from $109,000 in the previous corresponding period, and that the company contributed further funding of $34,000 (nil in the previous period) to meet current trading obligations.
Businesswire.co.nz
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