Infant formula maker Bellamy's has blamed delays in Chinese regulatory approval and a rebrand for a 63 per cent dive in first-half net profit and has warned a worse than expected hit is in store for the company's full-year result.
Bellamy's on Wednesday announced that profit for the six months to December 31 fell to $8.4 million from $22.6 million a year ago, after revenue dipped 26 per cent to $130 million.
Bellamy's will not pay an interim dividend.
It also flagged a worse than expected full-year result, with target revenue revised to between $275 million and $300 million reflecting zero Chinese-label sales during the half.
The company had predicted 10 per cent full-year revenue growth to $360 million back in August, but cut its guidance in October following a delay in approval from China's State Administration for Market Regulation.
Chief executive Andrew Cohen expected certification to be approved before 2019, with China still to give the thumbs-up 14 months after the company's initial application.
On Wednesday, the company also cut its normalised earnings margin to 18 to 22 per cent, down from 22 to 25 per cent, which it said also reflected increased investment in marketing and the China team over the coming period.
An additional one-off $12 million inventory provision was made for the rebrand transition.
"The business retains high confidence in the rebrand, our new product pipeline, continued food growth and successful SAMR registration," Bellamy's said in a release to the ASX.
"Although we remain mindful of the inherent risks of our industry and markets, we strongly believe the medium-term outlook remains compelling, supported by category fundamentals, our differentiated position and an aggressive three-year growth strategy."
Shares in the company were down 3.47 per cent to $7.78 at 1037 AEDT, down more than 65 per cent from an all-time peak of $22.52 in March 2018.
CHINA DELAYS, REBRAND HITS BELLAMY'S FIRST HALF
* Net profit down 63pct to $8.4m
* Revenue down 26pct to $130m
* No interim dividend
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