New Zealand-based honey products supplier Comvita has issued a profit warning.

Comvita said yesterday (5 April) trading conditions over the last two months in its two largest markets – Australia and New Zealand – “have not recovered in line with our earlier expectations”.

The company said it now expects an after-tax operating loss for the financial year ended 30 June 2017 “in the order of NZD7m” (US$4.8m). Reported net profit after tax is now expected to be approximately NZD9m.

The company said: “For forecast purposes, in terms of this June year financial result, we are now assuming that the informal channels out of Australia and New Zealand into China will not recover to our earlier forecast levels before 30 June 2017. To exacerbate the financial impact of this sales downturn, continued poor weather has further reduced the production of honey for the 2016-2017 season.”

Comvita CEO Scott Coulter said: “Although the informal trade channels will show growth over the previous half year this is still well under our previous expectations, and much of these sales to China have been satisfied by inventory held within the various channels to market.”

“The commencement of operation of our China distribution joint venture on 1 July 2017 is an important stepping stone to getting closer to our customers in China, and to be able to have more influence over our brand. Our navigation of the changing trading environment in mainland China continues to be a main focus to management as we look to enhance all channels to market.”

In interim half-year results up to December, Comvita booked a loss of NZD7.1m and an EBITDA loss of NZD2.8m, despite sales of NZD57.7m.