SYDNEY/BENGALURU, Aug 25 (Reuters) - Australian vitamin maker Blackmores Ltd on Tuesday scrapped its final dividend and said it would cut around 100 jobs after a two-third drop in annual profit, as sales in China, its biggest overseas market, were hit by the coronavirus outbreak.
The company, which once relied on Chinese demand for vitamins and health products to fuel sales growth, has struggled recently as the pandemic hindered movement of products to the country.
“We are currently implementing an organisational redesign. This will enable us to reinvest into high growth markets across Asia,” Chief Executive Alastair Symington said in a statement.
Share of Blackmores fell 2.1% in morning trade, while the broader market was up 0.6%.
The company confirmed the sale of its whey protein-based products IsoWhey and Wheyless would be completed next month and said it intended to divest its Global Therapeutics business, which develops Chinese herbal medicines and natural health products.
It reported a net profit of A$18.1 million ($13 million) for the year to June 30, down from A$53.5 million a year earlier, but in line with its lowered forecast of between A$17 million and A$21 million.
Blackmores did not provide a profit forecast for 2021, citing uncertainties related to COVID-19, although it did say it anticipated a return to profit growth.
It said the “organisational redsign” would likely result in a reduction of about 10% of its workforce. The company’s website says it has about 1,000 employees.
Revenue fell 3% to A$568 million, while overall sales to China, which include direct exports and in-country sales, fell 16% in the year due to tougher import rules and a slowdown in consumer spending.
$1 = 1.3961 Australian dollars Reporting by Byron Kaye in Sydney and Shashwat Awasthi in Bengaluru; Editing by Shinjini Ganguli and Rashmi Aich
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