A weak interim result from Noumi Ltd (the old Freedom Foods) on the final day of the December 31 reporting season on Monday that was dominated by a mass of negatives, including a slumping share price.
Noumi owns food and milk brands including MILKLAB, Australia’s Own, So Natural, and Vitalife and its in the process of rebuilding itself after a near death experience a couple of years ago and massive recapitalisation of the business which has given it a second chance.
Revenue was down 7%, adjusted earnings before interest tax depreciation and amortisation slumped 79% and the company saw a massive rise in the size of its net after tax profit.
And the share price ended down 12.2% to 25 cents.
Revenue of $265.3 million was lower as the business battled the impact of COVID-19 lockdowns, supply chain issues, staffing shortages, and rising (energy especially) costs.
Adjusted operating EBITDA was just $4.6 million and the net loss after tax of $65.8 million was a $50.8 million increase on the same period the year before.
But the net loss would have been $100,000 but for the write down of most of the losses from a US court case.
But it was not all bad news – barista plant-based milk range MILKLAB rose by 32% and 64% in export markets, despite the pandemic’s interruptions.
Noumi also said the US litigation settlement has also removed growth restrictions on MILKLAB and other nut-based milk brands.
Late last week, Noumi announced that it will pay $860,000 in Australian legal costs of its supplier California-based Blue Diamond Growers as part of the final settlement in a long-running dispute.
Noumi CEO Michael Perich said COVID-19’s disruptions had affected the business across the whole six-month period, but the company was seeing MILKLAB sales grow and gaining momentum in Asian export markets.
“As the impact of COVID-19 restrictions ease, and notwithstanding uncertainty created by rising geopolitical risks worldwide, we expect to see a recovery in financial performance across the business, with positive operating cashflows and increasing economies of scale driving earnings improvement,” he said.
Noumi said the Omicron wave at Christmas-New Year is still affecting sales.
It said this was boosting cost pressures relating to higher raw material and transport costs. Geopolitical risks are also contributing to price volatility (Russian aggression in the Ukraine which has sent prices of key rural commodities such as wheat, corn and soybeans higher).
As the Omicron wave eases, Noumi thinks its underlying financial performance will improve.
A headache still to be fixed is the shareholder class action in the Victorian Supreme Court over the problems that lead to the company’s financial problems in 2019-20.
