Australia's Capilano Honey profits bolstered from capital gain in asset sale to Comvita JV
By Rebecca Howard
Aug. 7 (BusinessDesk) - Australian honey maker Capilano Honey's joint venture with Comvita has had an immediate, if unrealised, benefit for the Queensland-based company's bottom line.
The two honey companies teamed up last year to create Medibee Apiaries in Australia to produce Leptospermum honey, commonly known as manuka, for medical and natural health products. In July last year, Capilano realised a capital gain of A$2.1 million following the sale of its manuka beekeeping assets into the joint venture with no tax attributable to the capital gain on the asset sale, it said. The total assets it sold into the joint venture were worth A$9.2 million.
Capilano Honey today reported a net profit of A$10.3 million for the year to June 30, up 9 percent on the prior year, it said in a statement to the ASX.
Medibee Apiaries was the single largest supplier of manuka to Capilano in the 2017 financial year, with purchases from the joint venture amounting to A$1.2 million. As of June 30, Capilano owed A$659,524 to Medibee Apiaries.
Medibee's revenue was A$1.6 million but its expenses were A$1.8 million, leading to a net loss of A$245,844.
The joint venture is focused on increasing the production and security of the manuka honey supply.
Capilano said strategic acquisitions have been made to increase the floral resources and the business is focusing on increasing hive numbers to fully utilise current floral resources. It noted profitability was impacted by a low production season but it remains confident in the joint venture's "future positive earnings potential".
The ASX-listed shares were unchanged at A$16.50 and have dipped 3 percent so far this year.
Partner Comvita is scheduled to report annual earnings last this month and has prepared the market for soft result on weak trading and a poor honey harvest. The NZX-listed company's shares slipped 0.7 percent to $5.96 today, and have slumped 25 percent so far this year.