Comvita's Manuka honey season starts strongly

Comvita chief executive Scott Coulter. Picture/NZ Herald.

NZX-listed Comvita said the 2018 honey season had started strongly, and that the company was confident in achieving a net profit of greater than $17.1 million for the current financial year to June 30.

Comvita, New Zealand's biggest manuka honey exporter, said weather conditions were generally favourable in December and January, ensuring a positive start to the harvest.

A poor season and trouble in the informal "grey" trade channels into China drove Comvita's net profit down to $9.8m in the 2016/7 year from $18.1m a year earlier.

"Although full visibility over the entire 2018 crop will not be available until April/May when we complete extraction of honey from the hives, the honey season has progressed to a point where we have early estimates of an average (or normal) harvest season," Comvita chief executive Scott Coulter said in a statement.

Based on an assumption of a normal 2017/18 honey production season and a solid recovery of the grey channel, "we have confidence in a full year net profit after tax of greater than $17.1m," chairman Neil Craig said.

"Given our apiary profit comes into the second half of our financial year, we are very pleased with how our financial result for the full year is tracking," he said.

Coulter said the Northland region and, to a lesser degree, the upper-Waikato region harvest was negatively impacted by the wet and cool September to November period and the recent severe storm in early January in the northern half of the North Island.

He said the storm affected the manuka flower production at a critical part of the season in these regions and that central North Island region was expected to deliver a honey yield of an average season.

Providing the above-normal temperatures continue for the remainder of this summer, the Wairarapa, Whanganui, East Coast and Hawkes Bay regions are expected to yield more honey than an average season, he said.

"Overall this is a welcome return to generally favourable weather conditions conducive to producing honey, compared to the extremely poor season in 2017," Coulter said.

On the back of strong sales growth in most of its export markets and a solid recovery in the grey channel from New Zealand and Australia into China, the company expects to report a "significant turnaround" on the 2017 half year loss of $7.1 million and on the $3 million record profit in the 2016 half year.

Comvita will release its result for hte first half to December 31 on February 23.